Definition: When the buyer signs the paperwork and puts down the deposit to buy a new home. This is the first step in a nine-month process. About 60 days after the paperwork is signed, the new home receives a permit and construction starts. About six months later, if the homebuyer receives their mortgage, the home can close. All of these steps are reported on, and all tell a little different story about health of the homebuilding industry.
Examples: If home starts are steady, but closings decline, then the homebuilder will end up with an inventory of spec homes for sale.
