Construction of new homes in the U.S. rose again in December as builders ramp up projects amid a persistent shortage of homes.

The December increase puts home construction at a seasonally adjusted annual rate of 1.70 million units, the Commerce Department reported Wednesday, the third consecutive monthly gain.

Applications for building permits, which can forecast future building activity, rose a whopping 9.1% to a seasonally-adjusted rate of 1.87 million units.

Both starts and permits topped expectations. Analysts surveyed by FactSet were expecting 1.65 million starts and 1.70 million permit applications.