New Residential Building Permits: Down In June

The U.S. Census Bureau and the Department of Housing and Urban Development have now published their findings for June new residential building permits. The latest reading of 1.220M was a decrease from 1.299M in May and slightly below the Investing.com forecast of 1.30M.

Here is the opening of this morning's monthly report, including a note regarding revisions:

Building Permits

With this release, unadjusted estimates of housing units authorized by building permits for January through December 2018 have been revised. Also, seasonally adjusted estimates of housing units authorized by building permits have been revised back to 
January 2013. All revised estimates are available on our website.

Privately‐owned housing units authorized by building permits in June were at a seasonally adjusted annual rate of 1,220,000. This is 6.1 percent (±1.2 percent) below the revised May rate of 1,299,000 and is 6.6 percent (±1.1 percent) below the June 2018 rate of 1,306,000. Single‐family authorizations in June were at a rate of 813,000; this is 0.4 percent (±1.0 percent)* above the revised May figure of 810,000. Authorizations of units in buildings with five units or more were at a rate of 360,000 in June. [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.

(Click on image to enlarge)

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.

(Click on image to enlarge)

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.

(Click on image to enlarge)