There are several economic indicators for the U.S. economy, and one of these is “housing starts.” Housing starts refer to the number of houses which started construction in a given period. In 2017, new housing construction accounted for about 5% of the country’s economy, including 27% of investments. As a leading economic indicator, this statistic could show if the economy is slowing down and is going into recession, or if the economy is improving.

1. Housing Permits and Starts:
Key Economic Indicators
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2. There are several economic indicators for the U.S. economy, and one of these is “housing starts.”
Housing starts refer to the number of houses which started construction in a given period. In 2017,
new housing construction accounted for about 5% of the country’s economy, including 27% of
investments. As a leading economic indicator, this statistic could show if the economy is slowing
down and is going into recession, or if the economy is improving.
Permits and Starts
Houses cannot be built without government approval in the form of permits. The number of permits
released gives an insight into the economy in the coming months. By themselves, these indicators
usually provide an overview of the economy, staggered over time.
But the number of permits and starts all depend on other factors: mortgage and interest rates.
Mortgage rates have a direct effect on housing. Higher mortgage rates increase housing costs and
reduce the number of borrowers. This leads to a decline in sales of existing homes, as well as a
decrease in starts.

3. The reverse is also true: lower interest rates fuel more starts and home sales. Starts also have an
effect on the bond market. An increase in housing starts would indicate strong growth in the bond
market, and which could also fuel inflation.
Housing Boom
The number of housing starts as reported in November 2017, indicate a possible housing boom.
According to the Commerce Department, housing starts for the period jumped 5.3 percent, which is
equivalent to 930,000 units, the highest recorded since September 2007.
In the same way, permits for single-family homes rose by 862,000 units, or 1.4 percent, which was
last reached in August 2007. These improvements indicate a possible contribution to the gross
domestic product in the last quarter of 2017.
Housing does not only affect the local economy. It is also a major indicator of a country's economic
health. For many in the construction and building industry, it is best to check these statistics to make
strategies that would suit the country's economic climate.

4. Sources:
http://bouldercontractors.com
http://pages.stern.nyu.edu/~nroubini/bci/housingstarts.htm
https://www.census.gov/construction/nrc/pdf/newresconst.pdf
https://www.cnbc.com/2017/12/19/us-housing-starts-nov-2017.html