WASHINGTON (Reuters) - U.S. single-family homebuilding and permits surged to more than 10-year highs in November, in a hopeful sign for a housing market that has been hobbled by supply constraints.

FILE PHOTO - A worker installs a metal roof on the top of a single story family home being built in San Diego, California, U.S., July 17, 2017. REUTERS/Mike Blake

Builders have struggled to meet robust demand for housing, which is being fueled by a labor market near full employment. Land and skilled labor have been in short supply, while lumber price increases have accelerated.

The Commerce Department said on Tuesday that single-family homebuilding, which accounts for the largest share of the housing market, jumped 5.3 percent to a rate of 930,000 units. That was the highest level since September 2007.

Pointing to further gains, single-family home permits rose 1.4 percent to a pace of 862,000 units, a level not seen since August 2007. The jump in groundbreaking on single-family housing units suggests housing could contribute to gross domestic product in the fourth quarter.

Investment in residential construction has declined for two straight quarters, weighing on economic growth. A survey on Monday showed confidence among homebuilders soaring to near an 18-1/2-year high in December, amid optimism over buyer traffic and sales over the next six months.

Prices of U.S. Treasuries remained at session lows after the data while the dollar .DXY pared declines against a basket of currencies. U.S. stock index futures were mixed. Last month, single-family home construction in the densely-populated South shot up 8.4 percent to the highest level since July 2007 as disruptions from recent hurricanes continued to fade and communities in the region replaced houses damaged by flooding.

Single-family starts in the West increased 11.4 percent to their highest level since July 2007. They were unchanged in the Northeast and fell 11.1 percent in the Midwest.

Overall housing starts increased 3.3 percent to a seasonally adjusted annual rate of 1.297 million units. While that was the highest level since October 2016, October’s sales pace was revised down to 1.256 million units from the previously reported 1.290 million units.

Economists polled by Reuters had forecast housing starts decreasing to a pace of 1.250 million units last month. Starts for the volatile multi-family housing segment fell 1.6 percent to a rate of 367,000 units.

Overall building permits dropped 1.4 percent to a rate of 1.298 million units in November, pulled down by a 6.4 percent decline in permits for the construction of multi-family homes.