Housing Starts

So...why is this even a stat?

Like, you hear it quoted all the time on CNBC between political fisticuffs and bad stock buying or selling advice. Well, it’s a stat people care about because, in theory, it is a canary in the mineshaft of leading economic indicators.

That is, housing builds are (presumably) carefully thought out. Lots of people inspect the proposed development area, and the loans then given out to the developers hoping to make leveraged riches exploiting old golf courses, precious riverfront property, and the new global-warming-created coastline.

It’s sort of a gumball problem in living color. Remember the gumball thing? Lots of people guess how many gumballs are in the glass case and, with so many opinions, the average of them is usually pretty accurate? So yeah, that’s kind of where and why housing starts get so much attention.

Bankers, realtors, loan people of all shapes and sizes, along with government regulatory people, all look at a housing development before it’s started and decide whether or not the economy looks robust enough to be able to sustain the buying of those homes some 8-15 months from when they are started, such that there will be demand for them to be bought.