Description:

Data represents the number of new homes under construction and future development rights issued to developers

Released:

Two to three weeks after the month

Calculation:

The data is tabulated by phone interviews and mailers to builders in 19,000 local markets across the country.

Key Point:

The main reason why the housing market is a good indicator of economic conditions is that it is closely tied to interest rates. As interest rates climb in an effort to cool a “hot” economy, capital becomes more expensive and construction slows. Furthermore, mortgages also rise and this dampens the demand for homes. In contrast, when the economic outlook looks weak, interest rates decline which spurs construction and demand for homes as borrowing costs decline. Housing also has a major impact on the economy due to its sheer size. When construction is robust, the demand for raw materials increases as well as the need for skilled construction workers.

Release site: Click here