This is an annualized indicator and therefore it should be noted the actual monthly values are multiplied by 12, it is released by the Census Bureau and represents the annualized number of new residential buildings that began construction during the previous month.
Housing Starts indicator tends to have a tight correlation with Building Permits indicator in the sense that, under normal conditions, it is virtually impossible to start a new construction without first having a building permit for it. This is why this indicator it is viewed as a second tier indicator as the information it is based on is already known from the Building Permit indicator. However, it is a leading indicator of economic growth as the construction sector has important roots into the GDP.
Looking at the six months data from February until July 2013, we are seeing a pick up in the housing starts for the last three months, and this might be a positive sign for the overall construction sector, providing this small trend that began there would have some legs into the near future.
The most important things to take into consideration when looking at the Housing Starts indicator are:
- release date: monthly, about 17 days after month ends;
- release time: 12:30 GMT during North American trading session;
- brings low volatility;
- tight correlation with Building Permits.