Tuesday brought good news on the housing supply front in the US, where a structural shortage continues to bedevil would-be buyers desperate to realize the American dream.

Housing starts rebounded sharply last month from a January swoon, government data showed.

The 10.7% month-to-month increase was the sharpest since May and came on the heels of the steepest decline since July of 2022.

The annual pace, at 1.521 million, easily topped estimates. Consensus was looking for 1.44 million.

Single-family starts ran at the second-briskest pace since April of 2022, and single-family permits continued to climb, reaching a new “since May of 2022” peak at 1.031 million (SAAR, obviously).

The uptick in new construction comes amid a marked improvement in builder moods.

The marquee gauge of builder sentiment had decoupled from single-family starts recently, but the two series now appear to be reconnecting.

Data released earlier this week showed the NAHB’s measure rose a fourth month in March to 51, suggesting more US homebuilders believe conditions are good than poor for the first time since last summer.

I won’t spend an inordinate amount of time analyzing the new construction figures. The read-through was clear enough: Some of January’s drop was weather-related, the upturn in NAHB sentiment bodes well for single-family starts, as does the lingering dearth of resale properties.

As ever, a lot hinges on the trajectory of mortgage rates, which itself turns on the evolution of the macro backdrop and monetary policy.