New Residential Building Permits: August Count Below Expectations

The U.S. Census Bureau and the Department of Housing and Urban Development have now published their findings for August new residential building permits. The latest reading of 1.139M was a decrease over 1.144M in July and below the Investing.com forecast of 1.170M.

Here is the opening of this morning's monthly report:

Privately-owned housing units authorized by building permits in August were at a seasonally adjusted annual rate of 1,139,000. This is 0.4 percent (±1.6%)* below the revised July rate of 1,144,000 and is 2.3 percent (±1.5%) below the August 2015 estimate of 1,166,000.

Single-family authorizations in August were at a rate of 737,000; this is 3.7 percent (±3.0%) above the revised July figure of 711,000. Authorizations of units in buildings with five units or more were at a rate of 370,000 in August. [link to report]

Here is the complete historical series, which dates from 1960. Because of the extreme volatility of the monthly data points, a 6-month moving average has been included.

Housing Permits

Here is the data with a simple population adjustment. The Census Bureau's mid-month population estimates show substantial growth in the US population since 1960. Here is a chart of housing starts as a percent of the population. We've added a linear regression through the monthly data to highlight the trend.

Housing Permits Population-Adjusted

A Footnote on Volatility

The extreme volatility of this monthly indicator is the rationale for paying more attention to its 6-month moving average than to its noisy monthly change. Over the complete data series, the absolute MoM average percent change is 4.4%. The MoM range minimum is -24.0% and the maximum is 33.9%.

For visual confirmation of the volatility, here is a snapshot of the monthly percent change since 1990.


For additional perspectives on residential real estate, here is the complete list of our monthly updates: