What are 'Housing Starts'

Housing starts are the number of new residential construction projects that have begun during any particular month. The New Residential Construction Report, commonly referred to as "housing starts," is considered to be a critical indicator of economic strength. Housing start statistics are released on or around the 17th of each month by the U.S. Commerce Department. The report includes building permits, housing starts and housing completions data. Surveys of homebuilders nationwide are used to compile the data.

BREAKING DOWN 'Housing Starts'

Investors and analysts watch the housing starts figures each month, comparing them with previous months' data and year-over-year periods. Because housing starts can be significantly affected by weather, the numbers are also presented as seasonally adjusted and smoothed using statistical formulas. The housing starts data are often revised to reflect the most current evaluations. Housing is a key part of the U.S. economy, which has an effect on related industries, such as banking, the mortgage sector, raw materials, employment, construction, manufacturing and real estate. In a strong economy, people are more likely to purchase new homes; conversely, in a weak economy, people are less likely to buy new homes.

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