A "Housing Start" is a new home on which construction has commenced. In May Housing Starts fell to a seventeen year low nation wide.
At first glance, this may seem like a negative for the already-battered U.S. housing market.
It's not.
Falling Housing Starts reflects the broader real estate market and shows us that builders are working hard to get their inventory of homes "off the books".
It would not be a strategic move for them to build new homes now -- each new unit makes selling the existing ones tougher.
So, when we look at the figure objectively, we can see that Housing Starts reaching a 17-year low could be good news, because real estate prices are based on supply and demand to a large degree.
With Housing Starts touching new lows, we can infer that there will be fewer new homes coming on the market in the coming months and that should help support higher home values nationwide for just about everyone.
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