The answer to 'why is my water heater rusty water' is that a rusty water heater is a common issue caused by sediment buildup, corrosion, or a damaged anode rod. This can lead to discolored, smelly, or metallic-tasting water from the tap.
Sediment buildup from hard water can cause the tank to rust over time. The anode rod, which is designed to corrode instead of the tank, may also be worn out and need replacement. In some cases, the tank itself can corrode due to age or poor water quality. This is more likely to happen with older water heaters.