About this indicator
About
Housing starts is the count of new privately owned residential construction projects begun in a given month, published jointly by the Census Bureau and the Department of Housing and Urban Development. The release covers single-family and multi-family units separately, broken out by census region. The data comes from a sample of building permit offices in 900 jurisdictions, scaled up to the full universe through statistical weights.
Why it matters
Housing is one of the few sectors that consistently leads the business cycle. Starts respond quickly to mortgage rates and credit conditions, often turning over six to nine months before the broader economy. The Federal Reserve treats housing as a primary transmission channel for monetary policy. A sharp drop in starts is a classic early-recession signal; a sharp rise after a cutting cycle starts is what unblocks the labor market through construction hiring.
How it's computed
Census counts a 'start' as the beginning of excavation for the footings or foundation of the structure. Building permits are reported separately and lead starts by roughly 1-2 months. The series is highly volatile month-to-month because individual large multi-family projects can swing the national total; the three-month moving average is what most analysts actually plot.
Pitfalls
Single-family and multi-family starts respond to different conditions. Single-family tracks household formation and mortgage rates; multi-family tracks rental market conditions and developer financing. The headline is the sum, which often masks the divergence. Weather can swing the seasonally-adjusted number significantly in any given winter month. The companion building permits series leads starts by one to two months and is less weather-sensitive, which is why it gets cited as the cleaner cyclical signal even though starts is the headline.