US housing starts rose more than expected in March, according to data released by the Commerce Department on Tuesday.

Housing starts were up 1.9% to a seasonally-adjusted annual rate of 1.319m units, versus expectations for a rise to 1.262m. The February figure, meanwhile, was revised to 1.295m from 1.236m.

Single-family housing starts in March fell 3.7% to 867,000 from February's revised 900,000 and permits for new construction were 2.5% higher to 1.354m last month, which was above consensus expectations of 1.321m.

Pantheon Macroeconomics economist Ian Shepherdson said: “The headlines look great, but all the increase in both starts and permits is in the volatile multi-family sector; single-family starts fell 3.7%, with permits down 5.5%, following recent weakness in new home sales.

“Single-family accounts for more than two thirds of housing construction so short-term swings in the multi-family numbers can't overwhelm the trend. Construction activity tracks sales, so a sustained rise in housing starts in the near-term is unlikely.”