* Housing starts increase 9.7 percent in January
* Building permits rise 7.4 percent
* Single-family starts jump 3.7 percent
* Import prices surge 1.0 percent in January
WASHINGTON, Feb 16 (Reuters) - U.S. homebuilding increased to more than a one-year high in January, boosted by a rebound in the construction of single-family housing units, and further gains are likely with building permits soaring to their highest level since 2007.
Other data on Friday showed a surge in import prices last month amid solid increases in the costs of petroleum and a range of other goods, bolstering expectations that inflation will accelerate this year.
Housing starts jumped 9.7 percent to a seasonally adjusted annual rate of 1.326 million units, the Commerce Department said. That was the highest level since October 2016 and followed an upwardly revised sales pace of 1.209 million units.
Economists polled by Reuters had forecast housing starts rising to a pace of 1.234 million units last month after a previously reported rate of 1.192 million units.
Building permits surged 7.4 percent to a rate of 1.396 million units in January, the highest level since June 2007.
Demand for housing is being driven by a tightening labor market, but rising mortgage rates and house prices could slow the momentum. Despite the unemployment rate being at a 17-year low of 4.1 percent, annual wage growth has not exceeded 3 percent.
In contrast, the annual house price increase topped 6 percent in November. The 30-year fixed mortgage rate rose to an average of 4.38 percent this week, the highest level since April 2014, from 4.32 percent in the prior week, according to mortgage finance agency Freddie Mac.
Mortgage rates are rising in tandem with U.S. government bond yields on worries about rising inflation.
INFLATION PUSHING HIGHER
Inflation concerns were underscored by a separate report from the Labor Department on Friday showing import prices jumping 1.0 percent in January after gaining 0.2 percent in December. In the 12 months through January, import prices rose 3.6 percent, the largest advance since April 2017, quickening from a 3.2 percent increase in the 12 months through December.
Data this week showed an acceleration in consumer and producer prices in January. The increases have boosted expectations that inflation will rise this year and potentially breach the Federal Reserve's 2 percent target.
Inflation is expected to be driven by a tightening labor market, a weak dollar and fiscal stimulus in the form of a $1.5 trillion U.S. tax cut package and increased government spending.
Higher inflation could prompt the Fed to be a bit more aggressive in raising interest rates this year than is currently anticipated. The U.S. central bank has forecast three rate increases for this year, with the first hike expected in March.
Yields on longer-maturity U.S. Treasuries rose briefly after the data before reversing course. U.S. stock index futures were trading slightly lower while the dollar firmed against a basket of currencies.
Single-family homebuilding, which accounts for the largest share of the housing market, increased 3.7 percent to a rate of 877,000 units in January. Single-family home construction rose in the South and Northeast, but fell in the Midwest and West.
Single-family home permits fell 1.7 percent in January. A survey on Thursday showed confidence among homebuilders hovering at lofty levels in February. Builders expected an increase in sales over the next six months.
Single-family home completions increased 2.2 percent to 850,000 units last month, the highest level since June 2008. While that rise will help to alleviate an acute shortage of houses on the market, single-family completions are half of what they were during the housing market boom in 2006.
Starts for the volatile multi-family housing segment surged 23.7 percent to a rate of 449,000 units in January. Groundbreaking on multi-family housing projects with five units or more rose to its highest level since December 2016. Permits for the construction of multi-family homes soared 26.5 percent. (Reporting by Lucia Mutikani; Editing by Paul Simao)