It is key economic indicator which refer to the figure of new construction projects started during certain month. The data of housing starts and building permits is released around 17th of each month by US Commerce Department. The report include several types of indicators which moves the market such as housing starts, housing completion data and building permits. All data is collected from survey of home builders across the country.
When foundation of residential structure or construction begin on footings, the housing starts is counted. The data of current month construction is compared with previous month to gauge how economy is doing.
Housing starts and building permits is considered critical indicator of economic strength because it has great impact on various related industries such as mortgage sector, banking, manufacturing, construction, employment, raw material and real estate. In growing and advanced economy, people are more likely to buy new homes while in weak economy, people are less likely to purchase new homes. This is what that make it key indicator for economic growth.
If demand for new home is increasing, it is an indication of bullish/positive market trend for USD traders while demand lower than expected indicate bearish/negative market trend.