New Residential Building Permits: February Down, Below Forecast

The U.S. Census Bureau and the Department of Housing and Urban Development have now published their findings for February new residential building permits. The latest reading of 1.213M was a decrease from 1.293M in January and below the Investing.com forecast of 1.260M. January was revised upward by 8K.

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

Building Permits Privately-owned housing units authorized by building permits in February were at a seasonally adjusted annual rate of 1,213,000. This is 6.2 percent (±1.8 percent) below the revised January rate of 1,293,000, but is 4.4 percent (±1.3 percent) above the February 2016 rate of 1,162,000. Single-family authorizations in February were at a rate of 832,000; this is 3.1 percent (±1.5 percent) above the revised January figure of 807,000. Authorizations of units in buildings with five units or more were at a rate of 334,000 in February.

Housing Starts Privately-owned housing starts in February were at a seasonally adjusted annual rate of 1,288,000. This is 3.0 percent (±13.0 percent)* above the revised January estimate of 1,251,000 and is 6.2 percent (±10.4 percent)* above the February 2016 rate of 1,213,000. Single-family housing starts in February were at a rate of 872,000; this is 6.5 percent (±10.9 percent)* above the revised January figure of 819,000. The February rate for units in buildings with five units or more was 396,000. [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.