A 7.2% increase in US house starts in March was greeted with cautious optimism on the back of news that permits for future building were also up.

The number of new units begun increased to an annually adjusted rate of 549,000, according to the department of commerce, slightly more than expected. Compared with the previous March new construction was down 14.4%.

Building permits approved during March were up 11.2% to 594,000 units.

Bob Nielsen, chairman of the National Association of Home Builders, said the report was encouraging.

“It means that some builders are cautiously beginning to re-stock their extremely thin inventories of new homes in anticipation of gradual improvement in consumer demand.”