Housing starts rose 7.2% between February and March even though new home construction remained well below year-ago levels.

March starts rose to a seasonally adjusted 549,000 units from a revised 512,000 units a month earlier, but still a 13.4% drop from the 634,000 units recorded during March of 2010, according to the Department of Commerce, Census Bureau and the Department of Housing and Urban Development.

Still, starts reversed a negative trend after plummeting 22.5% in February. In a housing market riddled with foreclosures and attractive pricing on existing real estate, March brought a slight dose of optimism to the home construction sector.

Meanwhile, homebuilding permits — often a measure of future construction activity — grew 11.2% to a seasonally adjusted rate of 594,000 units between the months of February and March, while still remaining 13.3% below the 685,000 units filed last year.