The Census Bureau surprised the market this week with the strongest monthly report for starts and permits in seven and a half years.

Starts soared 20.2% in April to a much higher-than-expected annual rate of 1.135 million and with permits up 10.1% to a much higher-than-expected 1.143 million.

Single family housing starts in April were up 16.7% from March, and up 15% from April 2014.

This chart from the Mortgage Bankers Association shows the running 12-month average of starts for each month to smooth out trends.

The chart, MBA says, shows that while some of April’s increase may “represent a rebound from weather-depressed February starts, the chart shows that starts have been steadily increasing since mid-2011.”

Click to enlarge

(Source: MBA)

They also note the chart shows that more than half of all starts have ben in the South region, which includes Maryland down to Florida and west to Texas.

“The average loan size in MBA’s Builder Mortgage Application Survey for purchase mortgages on new houses has been increasing over the last two years, matching the overall trend observed in our Weekly Application Survey, which includes applications for both new and existing homes,” MBA’s Lynn Fisher and Joel Kan write. “Due to the larger loan sizes, the increase in new home starts may not be directly associated with new first-timer homebuyer demand. However, if existing homeowners are trading up for new homes, the homes they exit may help increase for-sale inventory for first time buyers.”