Housing starts are an economic indicator used to assess the health of the housing market. Governments release monthly statistics on new construction, including the number of building permits issued and completed residential buildings. These reports can be broken down by type of construction and region. However, statistics can be manipulated to suggest a specific message.
Housing starts are one of many economic indicators used to judge the health of an economy and the housing market. Each dwelling beginning represents the beginning of a house or residential unit. Many governments maintain housing starts statistics and release them monthly so that people can track economic growth. People working in the financial market are often particularly interested in tracking housing starts, as are real estate agents and other real estate professionals, such as contractors, who may be concerned about the health of the housing market.
New construction statistics include the construction of detached homes, townhouses, condominiums and apartment complexes. Each unit is defined as a single “beginning”, so an apartment complex of 30 units is counted as 30 housing starts. A unit is considered started when construction begins on the home’s foundation.
Housing start reports are usually released in the middle of each month, using last month’s data. As well as including information about departures, they indicate how many building permits have been issued and how many residential buildings have been completed. Although rates fluctuate seasonally, sharp changes or changes from previous years can be of economic concern; if there are fewer matches, it suggests that fewer people are interested in buying houses.
Detailed statistics on housing starts generally break down by type of construction so that people can get an idea of what type of residential structures are being built and can also break down statistics by region. Looking at housing starts regionally can show people where economic growth is taking place and where downturns may be looming. Resources for information about housing starts can include the US Census Bureau, the Department of Housing and Urban Development, and the UK Office of National Statistics.
People may notice that information about housing starts is often discussed in the news when new reports are issued. They should be aware that statistics are often manipulated in creative ways to suggest or reinforce a specific message. For example, if a radio announcer says that “the number of households has dropped by 12%”, it is not clear which period is being covered and which periods are being compared. Comparing monthly, quarterly, or yearly home comparisons can reveal different results, as can comparing comparisons to last month, same month last year, last year monthly average, and so on.
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