Yesterday’s report that builders are feeling more optimistic about the housing market was validated today with the release of January’s starts and permits numbers, both of which continued an upward march, according to data from the U.S. Census Bureau and the U.S. Department of Housing and Urban Development.

Housing starts overall were at a seasonally adjusted annual rate of 699,000 last month, up 1.5% from December and a 9.9% jump from year-ago levels. While single-family starts were 1.0% lower on a monthly basis, that drop comes on the heels of a 12.0% jump in December. Multifamily starts were up 8.5%.

Part of the improvement can be attributed to good weather. Last month was the fourth warmest January on record since 1895 and one of the driest, points out Patrick Newport, U.S. economist at IHS Global Insight. And while the weather may be helping the numbers now, he says, the industry should expect some payback in March and April.

But even beyond mild weather, "housing construction has improved noticeably in the last three months," Newport concedes.

Indeed, housing permits, which are less influenced by weather, also saw improvement last month, gaining 0.7% from December and a full 19.0% year-over-year for a seasonally adjusted annual rate of 676,000.

Single-family permits climbed 0.9% from the previous month and were up 6.2% from January 2011 for an annual rate of 445,000—the highest level seen in 12 months. Numbers were up in the South, West, and Midwest, but down in the Northeast. Multifamily permits for projects with five units or more were up 1.0% on a monthly basis and up 61.2% year-over-year, for an annual rate of 208,000, the second-highest level seen in 39 months with improvement in all four regions.

"This year should be a better one for housing than 2011," Newport said, pointing to pent-up demand due to boomerang children who have moved home with their parents and who will eventually spark even greater demand for multifamily housing. Newport forecasts that multifamily starts will improve to 268,000 units this year from 177,000 last year. He predicts more modest gains for the single-family sector, with a forecast jump to 473,000 single-family starts this year from 429,000 in 2011.

Claire Easley is a senior editorat Builder.