Housing starts for December 2006 were up to 1.642 million which could point to a strong economic outlook for early 2007. Home builders generally won't start building a new home unless they are fairly confident it will sell during construction or soon after completion.
Housing starts are defined as construction of residential units (single family and multifamily) in a given month. Housing starts have economic significance because a rising (falling) trend will point to gains (declines) in demand for furniture, home furnishings and appliances.
New home construction also causes construction employment to increase which usually results in income being pumped back into the economy. When a home is sold the home builder receives revenue and in turn the home buyer will generally spend money on furniture, landscaping and household appliances.
Source: www.bloomberg.com
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YOUR Personal Guide to Real Estate
Saturday, January 20, 2007
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