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Housing Starts
-Expanded Definition-
Definition
A housing start is registered at the start of construction of a new building intended primarily as a residential building. The start of construction is defined as the beginning of excavation of the foundation for the building.
Importance Housing starts reflect the commitment of builders to new construction activity. Purchases of household furnishings and appliances quickly follow.
Interpretation The bond market will rally when housing starts decrease, but bond prices will fall when housing starts post healthy gains. A strong housing market is bullish for the stock market because the ripple effect of housing to consumer durable purchases spur corporate profits. In turn, low interest rates encourage housing construction.

The level as well as changes in housing starts reveal residential construction trends. Housing starts are subject to substantial monthly volatility, especially during winter months. Following either the three-month moving averages of the monthly levels or year-over-year percent changes will smooth out monthly volatility and provide a more accurate picture of the underlying trend.

It is useful to examine the trends in construction activity for single homes and multi-family units separately because they can deviate significantly. Single family home-building is larger and less volatile than multi-family construction. It is more sensitive to interest rate changes, and less speculative in nature. The construction of multi-family units can be substantially influenced by changes in the tax code and speculative real estate investors.

Frequency Monthly.
Source Bureau of the Census, U.S. Department of Commerce.
Availability Usually during the third week of the month.
Coverage Data are for the previous month. (Data for June are released in July.)
Revisions Monthly, data for the prior two months are revised to incorporate more complete information

Annually, new seasonal adjustment factors are introduced in February with the release of the January data. These revisions affects at least three years of data. The magnitude of the revisions is typically small.