Be careful in analyzing this data set with a microscope as the potential error ranges and backward revisions are significant. Also the nature of this industry variations from month to month so the rolling averages are the best way to view this series – and still the data remains in the range we have seen over the last 3 years.

 

The unadjusted rate of annual growth for building permits in the last 12 months has been around 10% – it is 4.4% this month.

Unadjusted 3 month rolling averages for permits (comparing the current averages to the averages one year ago) show that construction completions are lower than permits this month for the ninth month in a row.

3 month Rolling Average for Year-over-Year Growth Unadjusted Data

  Building Permits Construction Completions Current Movement decelerating decelerating

Unadjusted 3 Month Rolling Average of Year-over-Year Growth – Building Permit (blue line) and Construction Completions (red line)

 

Econintersect Analysis:

Building permits growth decelerated 3.2 % month-over-month, and is up 4.4 % year-over-year.

Single family building permits grew 6.6 % year-over-year.

Construction completions accelerated 0.4 % month-over-month, up 6.0 % year-over-year.

US Census Headlines:

building permits down 5.0 % month-over-month, up 4.7 % year-over-year

construction completions up 7.5 % month-over-month, up 8.4 % year-over-year.

the market expected (from Bloomberg):

Annual Rates Consensus Range Consensus Actual Housing Starts 1.100 M to 1.205 M 1.147 M 1.103 M Housing Permits 1.150 M to 1.211 M 1.170 M 1.206 M

Note that Econintersect analysis herein is based on UNADJUSTED data – not the headline seasonally adjusted data.

When more building permits are issued than residences completed – the industry is expanding – and this expansion was underway for three years (except for the last two months in 2014). In the graph below, any value above zero shows more permits are being issued than completions.

Difference Between New home Building Permits and Construction Completions (unadjusted)