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There was an increase in residential construction during the month of November igniting optimism that there might finally be a break in the gloom covering the housing market across the United States.

New housing starts were up significantly in the latter par of 2011.

According to data released by the Commerce Department on Tuesday, December 20, new housing starts hit a seasonally adjusted annual rate of 685,000 units, which is the highest annual rate posted anytime in the last 19 months. Housing starts during the month November were up 9.3% from the month of October. November’s housing starts for this year were 24.3% higher than the same month the previous year.

While there was a recent increase in housing starts which showed sizable gains within the past year, the number of housing starts is not within the range of what is considered to be a healthy market level. The annual pace for a healthy market is between 1 million to 1.5 million units and the current pace is still well below that mark.

Much of the recent construction had to do with a higher demand for rentals. The was an increase in town houses, apartments and other structures that are considered to be multifamily dwellings. The starts of residential structures with at least two units increased by 25.3%, while housing starts of single family homes only increased by 2.3%.

This data also shows that newly issued building permits, which are used as a gauge for future construction activity, increased by 5.7% when compared to the previous month. That increase puts the seasonally adjusted annual rate to 681,000, that rate is the highest posted since the month of March 2010.

Developers have been shifting from building single family housing to multifamily housing in order to adapt to the changing market. Many of the nation’s largest home builders have recently built or have started building multifamily housing structures.

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