Economic Indicators Term Paper

Total Length: 334 words ( 1 double-spaced pages)

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Housing Starts

This leading economic indicator tracks how many new single-family homes or buildings were constructed throughout the month. For the survey each house and each single apartment are counted as one housing start, (a building with 200 apartments would be counted as 200 housing starts). The figures include all private and publicly owned units, with the only exception being mobile homes, which are not counted.

The housing industry accounts for about 25% of investment spending and 5% of the overall economy.
Sustained declines in housing starts slow the economy and can push it into a recession. Likewise, increases in housing activity triggers economic growth.

Building permit data is released at the same time as housing starts. Permit activity provides insight into housing and overall economic activity. It is so important that it is included in the index of leading economic indicators.

Housing activity is directly impacted by mortgage rates. Higher interest rates increase housing costs and reduce the number of qualified borrowers, thus,.....

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