Economic Indicator Paper - Essay Example

For instance, the prevailing value of the American Real GDP, when calculated in relation to the year 2000 is approximately 12,000 billion dollars. GDP is a leading economic indicator and it usually rises before an upturn in real GDP and falls before a downturn in real GDP. Real GDP is also quite handy when it comes to predicting changes in the housing industry in the immediate future. Alongside such indicators as stock prices, average weekly hours worked in industries and housing starts, the trends set by real GDP can have a bearing on the overall health of the housing industry.

Housing starts are defined as the number of residential units on which construction is started every month. Housing starts are a key economic indicator that determines the health and future direction of the Housing industry. Usually though, an increase in housing starts indicates an increase in economic growth. The following chart published by the U.S.Bureau of the Census gives a historical perspective of housing starts. According to a credible industry expert, “housing starts fell to six percent in August of 2007 to a seasonally adjusted annual rate of 1.

665 million, while permits fell 2.3 percent from July and for the seventh consecutive month to a 1.722 million level. The August 2006 permit level was the lowest in 4 years. The month-over-month August starts decline occurred in both the single-family (-5.9%) and multifamily (-6.7%) sectors and in three out of the 4 Census regions, the exception being the Northeast”. These statistics mean that the housing industry is slated for a slowdown in the near future. Furthermore, with fears of an impending recession of the general economy, housing industry is also set to suffer to the extent.

Mortgage is a loan given to an individual or a corporation on the basis of the value of a house, building or any other