The light at the end of the tunnel is growing brighter for housing investors, particularly as vaccine rollouts gather steam and the economic recovery widens.

In a recent video breaking down what's driving the single-family housing market, John Chang, senior vice president and director of research services at Marcus & Millichap, notes that home sales have surged in recent months, with sales activity in February coming in 9.1% higher than 2020. That, in turn, pushed home prices up by 16.2% year-over-year to a median price of $334,500, a record high.

Chang says sales activity would likely be even greater, but the number of homes for sale on the market has dropped to a record low. Typically, new home construction ramps up to meet demand, he says, but new home starts tapered last month to just over 1 million houses—a figure that represents 55% of construction levels during the housing boom of 2006. Slower starts are probably the result of what Chang calls harsher than normal weather conditions in February, but are also certainly related to rising material costs, which Marcus & Millichap pegs at 11.4% higher than last year.