Construction activity for new single-family homes rose 3.9 percent to a seasonally adjusted annual rate of 430,000 units in October, the U.S. Commerce Department reported.

The increase was somewhat offset by an 8.3 percent decline in multifamily housing starts, which kept the overall housing construction rate flat at 628,000 units, the National Association of Home Builders said.

Single-family permits did rise by 5.1 percent to 434,000 units, its fastest rate since December 2010.

“The government's numbers for October housing production are very much in keeping with what home builders have been telling us in our recent surveys," said Bob Nielsen, NAHB chairman and a home builder from Reno, Nev. "While we still have a long way to go toward a recovery, some signs of hope are emerging in certain markets where economic and job growth is occurring and where foreclosures have not been an overwhelming obstacle."

The market is improving a little, David Crowe, the association’s chief economist said.

"The three-month moving averages for both housing production and permitting activity have been gradually rising since this spring, which is consistent with our forecast for slow improvement in market conditions through the end of this year and a positive sign that a more solid recovery will begin to take hold in 2012," Crowe said. "That said, the improvements we are seeing are still limited to scattered local markets where economies are improving, and obstacles such as tight credit conditions for builders and buyers, appraisal issues stemming from new homes being compared to distressed properties, and consumer concerns about job security are definitely slowing the progression of both a housing and economic recovery."