Discolored water can be due to some issues in the home. If a lot of hot water has been used and the hot water tank is almost empty, it could cause sediment inside the bottom of the tank to be churned up as the tank refills and can cause the water to appear rusty. It can also be a sign that the tank is deteriorating on the inside. There is a sacrificial anode or a piece of metal within the tank designed to decay before the tank does. If this is completely deteriorated, the inside of the tank itself will begin to decay, causing rust to appear. This can take anywhere from 6-10 years depending on the model of the hot water heater. This issue would be handled with a plumber. Aerators, or the screens on faucets, can also trap rust particles and cause the water to appear discolored as it flows from the tap. Cleaning them out, periodically, is a good practice.
Other times, it could be due to heavy demand on the distribution system. All of the treated drinking water travels through a network of iron pipes. All of the service connections to the homes are located towards the top of these pipes. Over time, as the water travels in the pipe, the water will react with the iron and cause rust particles to develop within the pipes. These rust particles usually settle to the bottom of the pipe and cause no issues to anyone. However, in times of high flow and demand, the sediment that has accrued at the bottom of the water mains will occasionally be churned up due to the high velocity of water and make its way into the water service lines.
This is particularly true when the fire department operates hydrants during active fires or training. Other contributing factors are in the spring when irrigation systems are first turned on. At this time of year, the flow of water is rapidly increased due to the sudden higher demand created by the irrigation systems. Also, when Town of Oyster Bay street sweepers use the fire hydrants to fill the tanks of the sweepers, they can potentially create rusty water. It is important to note, that while unpleasing to look at and taste, there is no adverse health effects to ingesting it.