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Housing starts surged in July to the highest level in eight months, underscoring the recent pickup in builder optimism and showing more traction in the residential real estate market.

The Mortgage Bankers Association on June 19 lowered its new and existing home sales forecast for the year to 5.28 million — a decrease of 4.1% that would be the first annual drop in four years.

Builders broke ground on 1 million U.S. homes in May, indicating the industry is picking up this quarter after a weather-induced slump to start the year.

Housing starts climbed 13.2% in April to a 1.07 million annualized rate following March’s 947,000 pace, the Commerce Department reported.

Housing starts in the United States were little changed in February after declining less than previously estimated a month earlier, indicating the home-building industry is stabilizing after bad winter weather curbed construction.

January housing starts dropped 16%, the largest decline since February 2011, the Commerce Department said Feb. 19.