Housing Starts and Building Permits

The release

How it is measured.

The Census Bureau, with the Department of Housing and Urban Development, surveys permit-issuing offices and a sample of building sites. A start is counted when excavation for the foundation begins. Both are published as seasonally adjusted annual rates, and split between single-family houses and buildings with several homes.

Why markets watch it.

Housing is the part of the economy most sensitive to interest rates, because nearly every purchase is financed with a loan. Permits come before starts and are read as the more forward-looking of the two.

How it is commonly misread.

The month-to-month change is often smaller than the survey’s own margin of error, which the Census Bureau prints beside each figure; a headline change may not be distinguishable from none. Apartment buildings arrive in lumps and swing the total, so the single-family line is steadier. Weather moves starts in winter. An annual rate is the month’s pace multiplied up, not a count of homes built in a year.

An explanation of why the release is followed, not a view on what any market will do when it is published. Educational information, not investment advice or a recommendation to trade.