The Most Important Indicators of Home Building Health

Experts are saying to ignore the drop in single-family housing starts at the end of 2017, as high buyer demand and builder confidence are more indicative of home building activity.

Due to high homebuyer demand, builders are now starting to build homes that don't have a buyer yet, as was the case during the last housing boom. John Burns, CEO of John Burns Real Estate Consulting, to CNBC that, "builders are shifting to the lower price points and entry-level, but their entry-level buyer is a more affluent entry-level buyer, somebody who went to college, got married in their 30s, buying in communities that are $800,000."

Some will blame the weather. Others will claim the figures are too volatile month to month. Bottom line, December's steep drop in single-family housing starts is not indicative of what is really going on at construction sites across the nation. This winter's chill was both brutal and early, and that was a factor, despite seasonal adjustments in the Census Bureau's reading. Starts fell hardest in the Northeast and South, where temperatures were significantly below normal. They were flat in the West, where weather is not a factor.

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