The current shortage of available homes for sale has been well-documented of late and this dynamic has played a key role in the recent spike in median home prices, especially in Los Angeles where home prices are up more than 20 percent from a year ago. Largely as a result of this supply shortage, homebuilders have begun to seriously ramp up construction of new homes.

A report by the Census Bureau showed nationwide housing starts came in at an annual rate of 917,000 in February, which was up slightly from the previous month and was a whopping 27.7 percent increase from February 2012. This was the third consecutive month housing starts exceeded an annual rate of 900,000—the first time that has happened since 2008, the Associated Press reports.

One economist—Thomas Feltmate of TD Economics—told the AP he expects housing starts to continue to increase gradually until the second half of the year when starts should really begin to gain steam. In fact, he sees housing starts surpassing an annual rate of 1 million units by the end of the year.

Supporting that prediction is the fact the Census Bureau reported building permits for future construction was up 4.6% percent on a month-over-month basis in February and was up 33.8% as compared to February 2012.