WASHINGTON - New housing starts rose but were lower than expected in November as construction activity for single family dwellings increased only marginally, a government report showed on Wednesday.

The Commerce Department said housing starts increased 8.9 percent to a seasonally adjusted annual rate of 574,000 units. Analysts polled by Reuters had expected housing starts to rise to 580,000 units. However, the percentage increase last month was the largest since May, indicating housing remained on a steady recovery path

October's housing starts were revised downwards to 527,000 units from the previously reported 529,000 units. Compared to the same period a year-ago, housing starts were down 12.4 percent, but way off the 54.9 percent decline seen in January.

Groundbreaking for single-family homes rose 2.1 percent last month to an annual rate of 482,000 units, after falling sharply in October. Starts for the volatile multifamily segment surged 67.3 percent to a 92,000 annual pace, reversing the previous month's plunge.

The housing sector, the main catalyst of the most painful U.S. recession since the 1930s, has been slowly improving after three straight years of decline. New home construction contributed to economic growth in the third quarter for the first time since 2005.

New building permits, which give a sense of future home construction, rose 6 percent to 584,000 units last month, the highest since November 2008. That compared to analysts' forecasts for 570,000 units. Compared to the same period a year-ago, building permits fell 7.3 percent.

(Reporting by Lucia Mutikani; Editing by Andrea Ricci)