Over the U.S. business cycle, fluctuations in residential investment are well known to systematically lead GDP. These … dynamics are documented here to be specific to the U.S. and Canada. In other developed economies residential investment is … broadly coincident with GDP. Nonresidential investment has the opposite dynamics, being coincident with or lagging GDP. These …

We assess the importance of residential investment in predicting economic recessions for an unbalanced panel of 12 OECD … investment contains information useful in predicting recessions both in-sample and out-of-sample. This result is robust to adding … that residential investment is particularly useful in predicting recessions for countries with high home-ownership rates …

Of the components of GDP, residential investment offers by far the best early warning sign of an oncoming recession …