New Residential Building Permits: January Above Forecast

The U.S. Census Bureau and the Department of Housing and Urban Development have now published their findings for January new residential building permits. The latest reading of 1.285M was an increase from 1.228M in December and above the Investing.com forecast of 1.230M. December was revised upward by 18K.

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

Building Permits Privately-owned housing units authorized by building permits in January were at a seasonally adjusted annual rate of 1,285,000. This is 4.6 percent (±2.0 percent) above the revised December rate of 1,228,000 and is 8.2 percent (±1.6 percent) above the January 2016 rate of 1,188,000. Single-family authorizations in January were at a rate of 808,000; this is 2.7 percent (±1.9 percent) below the revised December figure of 830,000. Authorizations of units in buildings with five units or more were at a rate of 446,000 in January.

Housing Starts Privately-owned housing starts in January were at a seasonally adjusted annual rate of 1,246,000. This is 2.6 percent (±11.0 percent)* below the revised December estimate of 1,279,000, but is 10.5 percent (±15.3 percent)* above the January 2016 rate of 1,128,000. Single-family housing starts in January were at a rate of 823,000; this is 1.9 percent (±10.8 percent)* above the revised December figure of 808,000. The January rate for units in buildings with five units or more was 421,000. [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.