Economic Indicator Forecasts: Housing Industry

Essay by KinghighUniversity, Bachelor'sA+, July 2005

download word file, 6 pages 4.2

Downloaded 411 times

Housing Starts

Housing starts as an economic indicator, can say a variety of things about an economy. The effects of housing starts can attribute to the measurement of spending, buying habits, interest rates, and much more within any given society. Finding a specific monthly forecast of housing starts is challenging, but not impossible. Most of the web searches our team found, would only offer a forecast that goes out six months. As we looked for extended forecasts; those that offered an 18-month period with more detailed reports, we found that most required a monthly subscription. Collectively, we were able to find two reports for this analysis that focused on the upcoming year, 2006.

The National Association of Home Builders (NAHB) conducted the first report. The NAHB conducts it research on its own, and thus fabricated the information off their results. The second report was part of the online edition of USA Today.

The USA Today report relied upon the input from economists who form the UCLA Anderson Forecast. Although there were no specific differences other than the sources, the reports did maintain what they estimate to be the result of housing starts by 2006.

The NAHB estimates 1,969,000 single and multi-family housing start units to be done by the end of 2005. This number is projected to decrease in 2006, dropping to 1,855,000. Although the USA Today article did not specify an amount for 2005, there estimate for 2006 came in a bit lower than that of the NAHB, with an estimate of 1.6 million. The data presented by the NAHB would appear to be more accurate. We believe this because their information appears to be more focused, and specific within the housing industry. Additionally, the trends in previous years support the drop they predict more accurately than what we...