According to a report by CNBC, housing starts fell in January to a seasonally adjusted annual rate of 1.25 million units, according to data from the Commerce Department. Construction of multi-family housing projects dropped, but upward revisions to the prior month’s data and a jump in permits to a one-year high suggested the housing recovery remained on track.

Homebuilding was up 10.5 percent compared to January 2016. Permits for future construction jumped 4.6 percent in January to a rate of 1.29 million units, the highest level since November 2015. David Berson, a senior vice president and chief economist at Nationwide, said in a statement that while housing starts surprisingly fell in January, December was revised upward and this makes the January drop look a bit larger.

“While weather was much warmer than usual in January across the country, usually a positive for housing starts in the winter, starts in the West plummeted by more than 41 percent – likely due to the extremely wet weather along the Pacific Coast (and especially in California) last month.”

Heavy rains on the west coast are partially to blame for the lower figures.

One challenge has been labor, and builders continue to struggle to find help and developed lots to build on, according to the National Association of Homebuilders (NAHB). The NAHB’s February report on builder sentiment showed that optimism settled back to a “normal range” as buyer traffic fell. However, the uptick in starts is a positive sign, according to Ralph McLaughlin, chief economist at real estate hub Trulia said in a statement.

“The uptick should also be good news for inventory-constrained home buyers, as permits eventually become starts, which eventually become new homes for sale. As a result, we shouldn’t be surprised to see a strong increase in starts in mid-2017.”

Berson noted that the nation’s solid economy also is a sign that housing starts may gain steam in the months ahead. Job gains have been plentiful, unemployment has remained low, wage growth has started to materialize and consumer confidence is surging as stock indexes reach all-time highs.

“Given positive fundamentals for housing demand, the rise in permits, and a probable return to more seasonable weather in coming months (especially in the West), we expect housing starts to rise again for 2017.”