New home sales show first rise since August

Data from the Commerce Department shows that housing construction is improving, as builders remain optimistic about the oncoming spring season.

The report showed a 3.9 percent increase in nationwide housing starts, including a gain of 6.9 percent in the construction of single-family homes, showing that builders were trying plan for increased housing demand.

But at the same time, there is still caution to the increase in building, as permits dropped 4 percent compared to last month's levels. Officials say that the recovery is still very slow, but more economic stimulus could increase its healing.

"The housing market still has a long way to go on the path to recovery," U.S. Commerce Secretary Gary Locke said. "The president's bipartisan middle class tax cut package aimed at protecting middle class families, removing uncertainty for America's businesses, and boosting our economy will help accelerate that recovery by increasing employment and incomes – key factors that help the housing industry grow."

Builders in the Houston real estate market have been particularly hard hit in recent months. Data from the Associated General Contractors of America released earlier this month showed a 3 percent drop in local construction jobs.