U.S. housing production increased 2.8 percent in March to a seasonally adjusted 946,000 annual rate, the National Association of Home Builders said.
The figures from the U.S. Housing Department and Census Bureau follow an upwardly revised 920,000 for February.
"Today's report is in line with our forecast of a gradual strengthening in the housing sector in 2014," said NAHB chief economist David Crowe. "However, several uncertainties including tight credit conditions for home buyers and erratic job growth are making builders cautious about getting ahead of demand."
Kevin Kelly, chairman of the association and a builder and developer from Wilmington, Del., said he is hearing good news from many members.
"We see improving signs of new-home construction as we move into the spring buying season," he said "The strongest recovery is in the Northeast and Midwest, where builders were hampered by severe winter weather earlier in the year."
Broken down by region, combined single- and multifamily housing production rose 30.7 percent in the Northeast and 65.5 percent Midwest, but fell 9.1 percent and 4.5 percent in the South and West, respectively.