Housing starts can predict changes in which of the following economic factors?

Housing starts are a key indicator of economic health because they reflect the level of construction activity and investment in the housing sector. An increase in housing starts generally signals that builders are confident about the economy, as they expect demand for new homes to continue growing. This confidence often correlates with broader economic expansion, leading to increased consumer spending, job creation, and overall economic growth.

When housing starts rise, it typically indicates that more people are looking to buy homes, which may stimulate related industries such as construction materials, appliances, and home furnishings. Furthermore, a thriving housing market can lead to higher property values, boosting wealth and encouraging further economic activity.

While investment rates, inflation rates, and current events may have some relationship with housing starts, they do not encapsulate the direct predictive nature that housing starts have in indicating economic expansion. Thus, the strongest connection is with economic expansion, making this the correct answer.