Home-building activity in the US rebounded sharply in April, the US Census Bureau reports. After two months of weakness, housing starts revived to 1.135 million units in seasonally adjusted annualized terms. The 20.2% increase in April is the strongest monthly gain since the early 1990s, pushing the number of newly built units to a new post-recession high.

The outsized increase is due in part to the comparison with an unusually soft run of construction activity in March. In any case, today’s numbers offer some hope that that the housing market may be strengthening after a tepid first quarter. Then again, the year-over-year trend, although it ticked higher last month, still reflects a substantial degree of deceleration in growth vs. recent history.

Housing starts increased 9.2% for the year through April—the first instance of growth for the annual comparison in three months. Newly issued permits for residential construction increased at a modestly lesser rate in annual terms through last month, rising 6.4%.

Construction activity that’s advancing at 5% to 10% a year isn’t spectacular by the standards of recent years—those days are long gone. But assuming that the current pace endures, the outlook for housing remains positive, albeit in the context of a relatively moderate late-cycle growth rate.

From a business cycle perspective, today’s numbers suggest that the economy will keep its head above water if only moderately so. Even after factoring in today’s upbeat numbers, the case for a strong second-quarter rebound is on thin ice. The good news is that today’s release provides a degree of comfort for arguing that the economy, although challenged in April, is still growing and so perhaps the notion of a Q2 revival, while battered and bruised lately, isn’t dead after all.

The question now turns to whether we’ll see any improvement in the macro profile for May for the economy generally? Today’s report inspires a fresh round of optimism, although the hard data for the current month won’t be known for several weeks at the earliest in terms of the key indicators.

Meantime, “housing demand is clearly picking up,” says David Sloan, a senior economist at 4Cast Inc. “Housing should show quite strong momentum over the next few quarters. Permits also suggest solid underlying demand.”

A second-quarter rebound that begins in earnest in May? Stay tuned….