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Housing Starts and Building Permits: An Overview on Reading it

Release Date: 17th of each month around 8:30 AM EST
(For Housing Starts and Building Permits report)

On or around the 17th of every month at 8:30 ET, the U.S. Census Bureau and the U.S. Department of Housing and Urban Development jointly release data for the previous month’s Housing Starts and Building Permits. Market participants encounter this data in a variety of formats, but this one is typical:

Released On 5/19/2015 8:30:00 AM For Apr, 2015



Prior Revised


Consensus Range


Starts - Level - SAAR

0.926 M

0.944 M

1.029 M

0.970 M to 1.120 M

1.135 M

Permits - Level - SAAR

1.039 M

1.038 M

1.070 M

1.050 M to 1.120 M

1.143 M

Here, SAAR means “Seasonally Adjusted Annual Rate.” So, of course the 1.135 million Housing Starts figure means that the number has been seasonally adjusted and the resulting monthly number has been put into a formula that yields a figure that represents what the yearly number would be if all the monthly numbers were identical to April’s.

These Housing Starts and Building Permits numbers were prodigious in April, the best month-on-month numbers in more than seven years. The Housing Starts were 20.2% above the March numbers (plus or minus 14%), while the Permits numbers were 10.1% above March (plus or minus 2.2%). Year-over-year numbers were also very strong at 9.2% and 6.4% above their respective April, 2014 numbers.

These yearly increases are substantial, but many analysts say that they do not denote the strong household formations the have characterized earlier instances of housing growth and economic growth that have occurred in tandem in recent decades. For much of this cycle’s housing growth is fueled by investments, not household formations.

These numbers had a strong and immediate effect on the dollar and ten year treasury rates, the latter of which rallied more than eight basis points. Indeed, these housing numbers “were strong enough to put a Fed rate hike back on the 2015 table,” as Art Cashin, famed floor manager for UBS put it.

So, these numbers are very often used to describe and predict more than just the goings on in housing; they are used as coincident and sometimes leading indicators for the economy as a whole. Of all the myriad housing numbers that hit the floor over the course of a month, these are probably the ones to which investors and the media pay most attention.

Let’s go back and review the composition of the report. This original report is published as a “joint release” by the U.S. Census Bureau and HUD. The three main figures that this release emphasizes are: housing starts, building permits, and housing completions.

Completions receive less attention from the media and investors, in part because they are less forward looking than the others. In April, 2015, month-over-month completion numbers were every bit as robust as in the other two categories, at an annual rate of 986,000, which is 20.4% above the March number.

Further down in the release, we see housing starts and permits are expressed in both seasonally adjusted and not seasonally adjusted format. Then, all figures are broken down into single-family and multiple-unit housing statistics.

Further on, they are separated into the Northeast, Midwest, South, and West regions, to display the often widely-varying conditions in those markets.

If you wish to stay abreast of the housing market, it is probably a good idea to follow the “Existing Home Sales” report put out by the U.S. National Association of Realtors, which comes out the fourth week of every month.

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