The nationwide decline in construction follows a red-hot November and marks the largest percentage slowdown since April, 2013.
The chilly Midwest weathered the worst decline, where housing starts fell 33.5 percent.
Overall, single-family home construction tumbled 7 percent and landed at a seasonally-adjusted rate of 667,000 units.
But David Crowe, chief economist at the National Association of Home Builders, says not to worry about the coming months. "As pent-up demand is unlocked and the labor market improves, we anticipate that 2014 should be an even better year for home construction," he told Realtor Magazine.