What is the Building Permits?

Counts new privately-owned housing units authorized by building permits in the United States. The Building Permits Survey collects reports from local permit-issuing offices, mostly municipalities, and imputes for offices that do not report. Monthly data run back to 1959, with estimates by structure type for the nation, regions, states, metro areas, counties and places.

Permits are authorizations, not construction. The Census Bureau lists reasons permits, starts and completions diverge: some authorized units are abandoned or redesigned, permit offices may classify townhouses as multifamily while Census counts them as single family, and the Census Bureau says less than 2 percent of all new construction takes place in areas with no permit requirement.

Production facts:

  • Publisher: U.S. Census Bureau
  • Frequency: Monthly
  • Typical release time: 8:30 a.m. in New Residential Construction (about 12th workday); revised detail 8:00 a.m. on the 17th
  • Primary metric: Building permits SAAR
  • Market sensitivity: High
  • Data type: Hard data
  • Economic indicator type: Leading
  • Revision risk: Medium

Key components to watch

The headline (Building permits SAAR) is the most widely quoted but rarely the most informative number. The components that follow reveal whether the headline result is broad-based or concentrated, improving or deteriorating, and consistent with prior trends.

  • 1 unit
  • 2 units
  • 3 and 4 units
  • 5 units or more
  • Census Regions

For any release with multiple components, the investor's task is not to memorize every number but to identify which components are most relevant to the current investment thesis and track those with the most care.

How to read the headline: actual versus expected

Markets react to the gap between the published Building permits SAAR and the consensus forecast, not to the level alone. A stronger-than-expected or weaker-than-expected result is defined against that forecast, so check what was expected before reading the number.

The Building Permits carries medium revision risk: National and regional figures in the New Residential Construction release are preliminary and revised in later releases. Read any revision to the prior period together with the new figure.

Market impact by asset class

The Building Permits primarily affects the following markets: Homebuilders, REITs, Banks, Treasuries, Mortgage markets, Stocks.

Stronger than expected result: In an inflation-elevated, tightening environment, a stronger result typically pressures interest-rate-sensitive assets and can strengthen the dollar. In a growth-slowing environment, a stronger result can be equity-supportive if it reduces recession fears.

Weaker than expected result: In a growth-concern environment, a weaker result may reinforce concerns about economic deceleration. If the Fed is watching this specific indicator for policy calibration, a persistent pattern of below-consensus results may shift the rate path.

In-line result: In-line results typically produce muted market reactions unless there are significant component deviations from expectations. The market had already priced the consensus, so confirmation requires little repricing.

Revision risk and methodology notes

The Building Permits carries medium revision risk. National and regional figures in the New Residential Construction release are preliminary and revised in later releases. Estimates by division, state, metro area, county and place, released about the 17th workday, are not revised, though year-to-date totals are. Monthly estimates are benchmarked to final annual totals each April, and seasonally adjusted data are revised for updated seasonal factors then. On average, preliminary seasonally adjusted permits are revised 3.8 percent or less.

Primary source: U.S. Census Bureau: Building Permits.

Publisher documents read for this page:

Common investor mistakes

  • Reacting to the headline without checking the components. The headline can diverge significantly from the underlying trend revealed by the components. A headline beat driven by a volatile component may not indicate the same strength as a broad-based improvement.
  • Ignoring revisions to prior periods. An initial strong number revised down in the following release tells a different story than a number that stands firm.
  • Not knowing what is consensus-priced. Reacting to a number without knowing what was already expected conflates information with noise. The market reaction is driven by the deviation from expectations, not by the level of the number.
  • Applying the same interpretation across different regimes. The same headline result has different implications depending on the Fed's current stance, the growth trend, and what is already priced into the yield curve and equity multiples.

Related releases

The Building Permits should be read alongside:

  • New Residential Construction
  • Housing Starts
  • Housing Completions
  • New Home Sales
  • Existing-Home Sales

Frequently asked questions

What is the Building Permits?

Counts new privately-owned housing units authorized by building permits in the United States. The Building Permits Survey collects reports from local permit-issuing offices, mostly municipalities, and imputes for offices that do not report. Monthly data run back to 1959, with estimates by structure type for the nation, regions, states, metro areas, counties and places. It is published monthly by U.S. Census Bureau.

When is the Building Permits released?

The Building Permits is released by U.S. Census Bureau on a monthly schedule: 8:30 a.m. in New Residential Construction (about 12th workday); revised detail 8:00 a.m. on the 17th. Exact dates are on the publisher's release calendar.

How does the Building Permits affect markets?

The Building Permits primarily affects Homebuilders, REITs, Banks, Treasuries. Its typical market sensitivity is rated High. A result that comes in stronger than consensus expectations generally moves affected markets directionally, while a weaker result can have the opposite effect. The direction depends on the current macro regime and what is already priced into markets.

What is the revision risk for the Building Permits?

The Building Permits carries medium revision risk. National and regional figures in the New Residential Construction release are preliminary and revised in later releases. Estimates by division, state, metro area, county and place, released about the 17th workday, are not revised, though year-to-date totals are. Monthly estimates are benchmarked to final annual totals each April, and seasonally adjusted data are revised for updated seasonal factors then. On average, preliminary seasonally adjusted permits are revised 3.8 percent or less.