A Long-Term Look: Residential Building Permits and Housing Starts

The U.S. Census Bureau and the Department of Housing and Urban Development published their August findings for new residential building permits and housing starts. This month, housing starts decreased 11.3% month-over-month and building permits increased 6.9%. Despite the fact that both are monthly seasonally adjusted annualized rate (SAAR) series, they are exceptionally volatile and subject to extensive revisions. Thus it is unwise to assign much significance to a single month.

Over the long haul, however, the two offer a compelling study of trends in residential real estate, especially when we adjust the permits and starts for population growth. Here is an overlay of the two series since the 1959 inception of the starts data and the 1960 inception of the permits data. The monthly data points are preserved as faint dots. The trends are illustrated with six-month moving averages of data divided by the Census Bureau's mid-month population estimates.

Building Permits and Housing Starts Population-Adjusted

Here is a closer look at the overlay since 1990.

Building Permits and Housing Starts Population Adjusted Since 1990