March housing starts gain on multifamily building

WASHINGTON (AP) — Housing construction posted a better-than-expected performance in March, rising to the highest level in 16 months on the strength of multi-family homes.

The Commerce Department report today showed that construction of single-family homes, the most important segment of the market, fell. It dropped 0.9 percent to an annual rate of 531,000 units, after a strong 5.7 percent gain in February.

But permits for single-family construction, a barometer for future activity, were up. That raised some hopes that the recovery of the housing market will stay on track and help sustain the broader economic rebound.

Overall, construction rose 1.6 percent to a seasonally adjusted annual rate of 626,000. That was higher than the 610,000 level that economists expected. In addition, the government revised February's numbers to show a 1.1 percent gain rather than the initially reported drop of 5.9 percent.

Applications for building permits recorded a better-than-expected increase in March, rising 7.5 percent to an annual rate of 685,000.