February was a good month for the housing market, as starts increased 5.2 percent to a seasonally adjusted 1.178 million annual rate, according to government data cited by the National Association of Home Builders.

Single-family production increased 7.2 percent to 822,000 units — its highest level since November 2007. Multifamily starts increased 0.8 percent to 356,000 units. 

"This month's report is consistent with positive builder sentiment and other economic indicators showing that the housing market continues to recover at a gradual pace," said NAHB Chairman Ed Brady, a home builder and developer from Bloomington, Ill.

NAHB Chief Economist David Crowe said he expects the market to continue showing strength.

"February's single-family gains indicate that this sector is strengthening in line with our forecast," Crowe said. "As the U.S. economy firms, job creation continues and mortgage interest rates remain low, we should see further growth in housing production moving forward."