What it means
Housing Starts measures the number of new residential construction projects begun in a month, reported by the Census Bureau around the 17th of the following month at 8:30am ET. Two related releases: housing starts (construction begun) and building permits (construction approved, leading housing starts by 1-2 months). Highly rate-sensitive — when mortgage rates rise, housing starts fall sharply.
Why it matters
Housing is one of the most rate-sensitive sectors of the economy. Falling housing starts signal that monetary policy is biting; rising signals stimulus working. The housing cycle has historically led economy-wide recessions by 6-12 months, making housing starts an important early-warning indicator.
How to use it
Track the 3-month moving average of housing starts. Permits lead starts by 1-2 months; watch both. Sustained declines in permits indicate cooling housing market; falling housing starts confirm. Most-watched as a leading indicator for homebuilder stocks (LEN, DHI), REITs, and overall growth.
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