New Residential Building Permits: Down 10.8% In February

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 1.682M was down 10.8% from the January reading and is below the forecast of 1.750M.

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

Building Permits

Privately-owned housing units authorized by building permits in February were at a seasonally adjusted annual rate of 1,682,000. This is 10.8 percent (±1.0 percent) below the revised January rate of 1,886,000, but is 17.0 percent (±1.4 percent) above the February 2020 rate of 1,438,000. Single-family authorizations in February were at a rate of 1,143,000; this is 10.0 percent (±0.8 percent) below the revised January figure of 1,270,000. Authorizations of units in buildings with five units or more were at a rate of 495,000 in February. [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.

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