Housing Starts Decline, Reflecting Higher Building Costs

Building activity cooled in January as the number of new homes construction started dropped. This means fewer new houses are being planned and begun by builders.

This trend is largely due to the increasing costs of materials like lumber and steel, as well as higher wages for construction workers. These expenses make it more expensive for builders to start new projects.

For someone thinking about investing for the long haul, this matters because a slowdown in building can mean less new housing available. When there's less supply, prices for existing homes might not fall as much as they otherwise could, or could even rise.

This report from the U.S. Census Bureau gives us a snapshot of the construction industry's health. It's one piece of the puzzle when looking at the overall economy and how it might affect different investments over time.