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New Residential Building Permits: May Count Rises, But Less Than Forecast

June 17, 2016

by Doug Short

The U.S. Census Bureau and the Department of Housing and Urban Development have now published their findings for April new residential building permits. Revisions were made back to January of 2014.

The latest reading of 1.138M was an increase over 1.130M in April but below the forecast of 1.150M.

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

Privately-owned housing units authorized by building permits in May were at a seasonally adjusted annual rate of 1,138,000. This is 0.7 percent (±1.3%)* above the revised April rate of 1,130,000, but is 10.1 percent (±1.8%) below the May 2015 estimate of 1,266,000.

Single-family authorizations in May were at a rate of 726,000; this is 2.0 percent (±0.9%) below the revised April figure of 741,000. Authorizations of units in buildings with five units or more were at a rate of 381,000 in May. [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: