JUNE 2004

Private Housing Starts

Trends in housing starts are a useful indicator of the state of the economy and the outlook for the future. Consumers invest in new homes when they have a positive outlook on the economy. In addition to representing a major investment in homes, housing starts also trigger companion investments in furniture, kitchen appliances and equipment. Finally, the willingness and ability of consumers to make such investments bodes well for growth in other sectors of the economy and those firms that provide the critical financing.

Data shown in the table below were just released by the U.S. Department of Commerce and the U.S. Department of Housing and Urban Affairs. The table shows that the mild slowdown in the economy has had little adverse effect on the new housing industry. For the 12-month period ending in April 2004, there were 1,969,000 new housing units started, up 11.2 percent from the previous12-month period. Growth rates differed significantly among regions. The lowest growth rate was in the West (0.2 percent), and the highest was in the South (31.7 percent). In both years, about four-fifths of the housing starts were for single-family residences.

Source: Joint release of U.S. Department of Commerce
and U.S. Department of Housing and Urban Affairs