This monthly release from the Census Bureau tracks the number of new homes being built and permits for future construction. Home building has quite a strong effect on the economy – from demand (or lack thereof) for associated labor, building materials, and goods to furnish homes – the industry can affect many diverse businesses.
Housing starts include building of single-family homes, buildings with two to four units, and buildings with five or more units. Building permits are required in advance of a build in most locations and tend to be a good predictor of future home building activity. Incidentally, Building Permits are one of the ten components of the Conference Board’s Leading Economic Indicator.
The latest report for Housing Starts for February came in at 1.450 million, 8.8% above the revised January reading and much better than forecast. Building Permits for February were at 1.524 million, 13.8% above the revised January figure and also better than forecast.
After five consecutive declines, both series increased notably in February. It’s important to point out the volatility of this series and despite these positive developments, their six-month moving-average still points to an overall decrease.
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