U.S. housing starts rose more than expected in April, the government said in a report Wednesday that offered signs that the battered housing market is slowly recovering, even though building permits for future projects fell after reaching a more than three-year high in March. The Commerce Department said housing starts increased 2.6 percent to an annual rate of 717,000 units last month. Compared to April last year, residential construction was up 29.9 percent. Construction increased for both single-family homes and apartments. Groundbreaking for single-family homes-the vast majority of the market-increased 2.3 percent, while starts for multi-family homes rose 3.2 percent. Building permits, a measure of future construction, fell in April to an annual rate of 715,000. However, the drop was because of a more than 20 percent decline in the volatile apartment category. Permits for single-family homes rose nearly 2 percent. Despite the rise in housing starts last month, they remain less than one-third of their peak in early 2006, and the rate of construction and the level of permits requested remain about half the pace considered healthy. Still, residential construction in the first quarter grew at the fastest pace in almost two years and is expected to contribute to economic growth this year for the first time since 2005.