LOS ANGELES—The Commerce Department reported earlier in May that April's new housing starts represented the best month since November 2007. Meanwhile, new permit applications, an indicator strongly correlated with near-term construction, were up 10.1% for the month.

That news was followed by the Census Bureau's report that new-home sales rose 6.8% in April from the previous month, and by S&P Dow Jones Indices' report that home prices across the US had risen 5% year-over-year for March. The National Association of Realtors is forecasting strong growth for both new starts and existing-home sales for the remainder of this year as well as into 2016. All of this positive movement in the residential sector has equally positive implications for industrial, says CBRE.

“All of the raw materials and finished goods that contribute to a new home flow through the supply chain and spend some time in an industrial property,” says David Egan, Americas head of industrial research at CBRE. “The increase in both new home construction and existing sales provide another reason to expect continued strong performance of the US industrial market.”

New starts are expected to hit 1.4 million units in 2016, up 40% over 2014, while existing sales are projected to reach 5.5 million units, up 20% over last year. That being said, CBRE notes that new starts will still trail the peak from the previous cycle by nearly 30%.

A big gainer from growth in the housing market has been the bigger distribution centers, specifically those in the mid-sized to large bracket. A first-quarter 2015 survey of CBRE industrial brokers showed that in virtually all markets, users distributing goods linked to the housing sector—among them appliances and furniture—were among the top five most active tenant groups in the market. “These bulk goods are typically warehoused in the larger “big box” facilities that have been extremely popular with users in this cycle,” according to CBRE.

Yet the greatest impact is at the other end of the spectrum: light industrial properties of 200,000 square feet or less. Demand for these properties has been strongly correlated historically with new home construction. That's because the raw materials used tend to be stored in smaller, local warehouse facilities close to the construction activity rather than in big box distribution centers.

CBRE says demand for these light industrial properties has surged in recent quarters, representing 50% of US net absorption since Q1 '14. In the markets that are forecasted to have the most housing growth—i.e. in new starts as well as existing sales—the demand for light industrial property is even more pronounced. That bodes well for Dallas, Phoenix and Silicon Valley, among other markets.

Declining unemployment rates and the prospect of stronger wage growth among a broader portion of the labor market will continue to drive a recovery in the housing market in many metros throughout the US, says CBRE. This will provide a tailwind to demand across multiple styles of warehouse space for the next few years.