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Housing starts in December are expected to rise 3.1% on a seasonally adjusted monthly basis, according to The Capital Spectator's average econometric forecast. That compares with a 3.0% decline in the previous report. The projection is roughly in line with consensus forecasts from economists.

Here's a closer look at the numbers, followed by brief definitions of the methodologies behind The Capital Spectator's projections:

VAR-3: A vector autoregression model that analyzes three economic series to project housing starts: new home sales, newly issued permits for residential construction, and the monthly supply of homes for sale. VAR analyzes the interdependent relationships of these series with housing starts through history. The forecasts are run in R using the "vars" package.

ARIMA: An autoregressive integrated moving average model that analyzes the historical record of housing starts in R via the "forecast" package.

ES: An exponential smoothing model that analyzes the historical record of housing starts in R via the "forecast" package.

Source: December 2012 Housing Starts Preview