U.S. Housing Starts: November Preview
James Picerno | Dec 15, 2014 12:36PM ET
Housing starts are expected to increase to an annual pace of 1.030 million in Tuesday’s update for November, according to The Capital Spectator’s median point forecast for several econometric estimates. The projection represents a moderate improvement over October’s 1.009 million units.
Three estimates based on recent surveys of economists point to a slightly higher gain for housing starts in November relative to The Capital Spectator’s median projection.
Here’s a closer look at the numbers, followed by brief definitions of the methodologies behind The Capital Spectator’s forecasts that are used to calculate the median estimate:
- VAR-3: A “vars” package.
- ARIMA: An “forecast” package.
- ES: An exponential smoothing model that analyzes the historical record of housing starts in R via the “forecast” package.
- R-1: A linear regression model that analyzes the NAHB Housing Market Index in context with housing starts. The historical relationship between the data sets is applied to the more recently updated NAHB Housing Market Index to project housing starts. The computations are run in R.
- TRI: A model that’s based on combining point forecasts, along with the upper and lower prediction intervals (at the 95% confidence level), via a technique known as “triangle” package.
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