The Commerce Department has reported a 6.6 percent increase in new housing starts to an annual rate of 1.17 million units. The increase is good news after March’s 9.4 percent drop.

New homes are being built ahead of last year’s pace, largely due to a substantial increase in the construction of single family houses. The Commerce Department reported that few existing homes are listed for sale, creating the incentive for developers to grow through building.

The Midwest and South are seeing most of the new homes, and the West is seeing the least.

Starts are up 22.2 percent in the Midwest and 14.1 percent in the South but down 10 percent in the West and 7.6 percent in the Northeast.

Permits to build new houses climbed 3.6 percent to an annual rate of 1.12 million.

The National Association of Home Builders (NAHB) housing market index held at 58 this month. A reading over 50 means most builders generally see conditions in the single-family housing market as positive.

The index hasn’t moved from 58 for four straight months, but the NAHB says this is good news.

“Builder confidence has held steady at 58 for four straight months, which indicates that the single-family housing sector remains in positive territory," said NAHB Chairman Ed Brady. "However, builders are facing an increasing number of regulations and lot supply constraints.”

The index components measuring sales expectations in the next six months increased three points to 65, while the component charting current sales conditions and the index gauging buyer traffic both held steady at 63 and 44, respectively.

The number was weighed down by current sales, but the NAHB is optimistic as sales expectations for the next 6 months are showing an improvement having increased from 62 to 65. Chief economist Robert Dietz commented that the strength in current sales was an indication of builders’ confidence in the markets strength.

“The fact that future sales expectations rose slightly this month shows that builders are confident that the market will continue to strengthen,” Robert Dietz, NAHB’s chief economist.