US housing construction posted a better-than-expected performance in March, rising to the highest level in 16 months on the strength of multi-family homes, the Commerce Department said in a Friday report. The Commerce Department report showed that construction of single-family homes, the most important segment of the market, fell-dropping 0.9 percent to an annual rate of 531,000 units, after a strong 5.7 percent gain in February. But permits for single-family construction, a barometer for future activity, were up-raising hope for recovery in the housing market. Overall, construction rose 1.6 percent to a seasonally adjusted annual rate of 626,000-higher than the 610,000 level that economists expected. In addition, the government revised February's numbers to show a 1.1 percent gain rather than the initially reported drop of 5.9 percent. Applications for building permits recorded a better-than-expected increase in March, rising 7.5 percent to an annual rate of 685,000. The weakness in single-family construction was offset by an 18.8 percent surge in the smaller multifamily sector, which rose to a seasonally adjusted annual rate of 95,000 units. Analysts do not expect this strength to continue given a multitude of problems facing commercial real estate at the moment. That includes high apartment vacancy rates and rising foreclosures of commercial properties.