Explains the use of housing starts as an economic indicator of single and multi-family dwellings begun during a certain period.
Written in 2005; 1,512 words; 5 sources; APA; $ 49.95
Paper Summary:
This paper explains the use of housing starts and their significance for the home construction industry as well as other interests that might be affected by the housing industry such as investors and lending institutions. Furthermore, the paper explains that housing starts are a leading indicator of the economy as a whole, since they provide a direct indicator of issues of supply and demand.
From the Paper:
"On a micro level individual businesses may view these statistics, both regionally and nationally to help them adjust their sales, financing and output of production. In many situations builders rely on presales to fianc? the production of homes yet, this is not always available, as the real estate market must always show a marginal surplus so individual home investors have a market to choose from. In the event that a building project is not pre-sold the finished project must be floated by the builder and his investors until the completed home sells. Basically, the builder and his or her investors are paying a mortgage payment for the cost the project incurred during the construction process. During this time the builder is paying an increased level of interest on the construction loan for the property. If the business is small enough or does not possess the needed capital to float all these construction loans the company may go bankrupt."
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