By Vicki Needham - 05/16/12 01:45 PM EDT
The boost came from a combined pickup in housing starts on single-family homes, up 2.3 percent, and apartment buildings.
Single-family homes make up about 70 percent of residential home construction and have the largest economic effect on jobs.
Building permits, which estimate the amount of construction in the months ahead, dropped 7 percent last month to a seasonally adjusted annual rate of 715,000, down from the 769,000 rate after hitting a 3.5-year high in March, the report showed.
The pace is 23.7 percent ahead of the revised April 2011 estimate of 578,000.
The bulk of the decline came from multi-family construction, a volatile component that has been tracking upward as demand has grown for renting.
Permits fell 20.8 percent to a 240,000-unit rate, which is essentially back to trend, after a large increase last month.
Otherwise, single-family permits increased to 475,000, a 1.9 percent increase above the 466,000 pace in March.
Housing completions also picked up pace in April, up 10 percent to a seasonally adjusted annual rate of 651,000.
Single-family housing completions in April were at a rate of 489,000, this is 11.4 percent above the revised March figure of 439,000.
In a separate report on Tuesday, homebuilders' confidence in the housing market hit its highest point in five years in May.
Builder confidence in the market for newly built, single-family homes jumped five points to 29 this month from a downwardly revised reading in April, according to the National Association of Home Builders/Wells Fargo Housing Market Index.
Any reading below 50 represents negative sentiment; the index has not eclipsed 50 since April 2006.
The sentiment about current sales conditions and traffic of prospective buyers each rose five points, to 30 and 23, respectively, in May, with the buyer traffic hitting its highest level since April 2007.
The component gauging sales expectations in the next six months rose 3 points to 34.
Lower mortgage rates are beginning to help the market but potential buyers still face many hurdles, including high down-payment requirements and trouble getting a home loan.
Builders also have faced stiff competition from less expensive foreclosed homes that are clogging up the market, stifling demand for new construction.