New figures show that US housing starts rose by more than expected in March, to their highest level since November 2008. Planning permits to build new homes also hit a 17-month high.
The Commerce Department said housing starts rose 1.6% from February to a seasonally adjusted annual rate of 626,000 units.
February's figures were also revised up to show a 1.1% increase, which was previously reported as a 5.9% drop. Compared with March last year, starts were 20.2% higher.
The US housing market recovery has stalled in recent months and sales have dropped after strong gains in the second half of 2009. The sector, a key factor behind worst economic downturn since the Great Depression, remains one of the main obstacles to a recovery.
Analysts are cautiously optimistic the improving economic conditions, particularly the resumption of job growth, will help put the sector back on an upward trend and March's housing starts data will be seen as a step in that direction.
New building permits, which give a sense of future home construction, jumped 7.5% to a 685,000-unit pace last month - the highest level since October 2008, the Commerce Department said. That compared with analysts' forecasts for 630,000 units.
