Market importance: High importance.
Meaning: Shows the number of new housing starts and future building permits in the U.S., reflecting the level of investment.
Release time: Two to three weeks after the end of the corresponding month, 8:30 a.m. Eastern Time.
Coverage period: The just-ended month.
Revision situation: Appropriately revised, quarterly adjustment in April.
As investment fluctuates greatly in modern national economic cycles, the consideration of investment fluctuations is a very important aspect of economic analysis, and real estate is a major item in investment.
Construction indicators generally occupy an important position in the data systems published by various countries, because the real estate industry has a pivotal position in modernized economies, and the economic prosperity of a country also tends to be reflected in construction indicators.
As we mentioned above, housing construction is an investment and is an important driving force for national economic growth. In the U.S., building permits and housing starts are two of the more important indicators in the construction category, and they examine the residential or non-industrial use of the construction category.
Generally speaking, the increase in housing starts will increase the number of people employed in the construction industry, and newly purchased households usually buy other durable consumer goods, which, through the multiplier effect, increases the output and employment of other industries. The construction industry is very important for the business cycle because the changes in housing construction will directly point to economic recession or recovery.
Due to the vast area, in the U.S., new housing starts are generally divided into two types: single-family and multi-family. When a single-family house starts construction, the base number of one household is 1, and when a 100-unit apartment starts construction, its base number is 100, and the new housing start rate is calculated accordingly.
Experts generally pay more attention to the construction of individual homes, because the units in multi-family housing can be modified at any time, have greater volatility, and the data is usually not available. In the U.S., new housing starts are usually announced on the 16th to 19th of each month.
Under the premise of other conditions being equal, the increase in new housing starts and building permits, theoretically, is a positive factor for the country's currency and will push the country's currency to strengthen, while the decline or lower than expected of new housing starts and building permits will put pressure on the country's currency.