This compares with an average forecast among analysts of just under 1.4 million new housing starts in March, according to Bloomberg.
When it comes to single-family homes - the increase was 9.7 percent to 1.0 million homes.
According to a separate report from the U.S. Commerce Department, orders for capital goods, an indicator of business investment, rose 3.3 percent in March, compared with 1.6 percent in February.
For all durable goods, new orders increased by 0.8 percent in March, compared to the expected 0.5 percent.
