Construction of new homes in the U.S. rose sharply during January but building permits fell surprisingly, indicating the continued weakness in the housing industry, the Commerce Department said on Wednesday.

The housing starts rose 14.6 percent to a seasonally adjusted annual rate of 596,000 units in January, compared with the revised figure of 520,000 in December last year.

Markets had expected the housing starts to rise to 550,000 units in January.

However, new building permits, a measure of future construction, fell sharply by 10.4 percent to 562,000 in January against the revised figure of 627,000 in December.

Analysts had expected permits to drop to 570,000 units for the month.

Building permits for single-family homes fell 4.8 percent to 421,000 in January month-on-month.

Homebuilders remain cautious about the housing market in the U.S as the unemployment rate continues to remain high around 9 percent.

A new CBS News poll showed that more than half of the Americans believe that the country is still in recession and are less confident on the improvement in the nation’s economic conditions over the next few months.