What's the difference between housing starts and building permits?

By Brent Radcliffe AAA
A:

Housing starts and building permits are economic indicators used to determine the health of the housing sector. In the United States, housing start and building permit data is released by the Census Bureau, and is estimated from the Survey of Construction (SOC) and the Building Permits Survey (BPS). Data is released each month in the New Residential Construction report.

The building permit statistic is an estimate of the number of new housing units that have been issued a permit during a given month. The Census Bureau collects permit data by sending a survey to permitting offices.

The housing starts statistic indicates the number of housing units that began construction during a given time period. Field representatives of the Census Bureau sample individual permits from permit offices, and check with permit holders to determine if construction has begun.

Economists look at building permits and housing starts to determine how well the economy is performing. If more building permits are being issued economists may assume that more investment is being allocated to the housing market, which traditionally makes up 5% of the U.S. economy. A decline in the number of housing starts relative to building permits may indicate that planned construction is being put off, possibly because of unfavorable economic conditions.

RELATED FAQS

  1. Which real estate agency is the best to work for?

    Understand the different factors to consider when choosing which real estate company to work for and the ways agencies vary ...
  2. Why do real estate agents fail?

    Becoming a successful real estate agent requires a mindset that is built for success and strong, consistent action that buttresses ...
  3. Where is the Bureau of Labor Statistics located?

    Visit offices and libraries staffed by economists with the Bureau of Labor Statistics to obtain help reading data during ...
  4. Is the Bureau of Labor Statistics accurate?

    Read this brief analysis of the accuracy of Bureau of Labor Statistics, including a summary of the types of reports issued ...
RELATED TERMS
  1. Building Permits

    A type of authorization that must be granted by a government ...
  2. Housing Starts

    The number of new residential construction projects that have ...
  3. Commercial Real Estate Loan

    definition of a commercial real estate loan
  4. Business Broker

    A professional who specializes in the purchase and sale of companies. ...
  5. Lion economies

    A nickname given to Africa's growing economies.
  6. Realtor Property Resource (RPR)

    A National Association of Realtors member benefit providing realtors ...
comments powered by Disqus
Related Articles
  1. Investing In Real Estate Versus REITs
    Investing Basics

    Investing In Real Estate Versus REITs

  2. 3 Ways To Value Real Estate Investments
    Home & Auto

    3 Ways To Value Real Estate Investments

  3. How To Calculate ROI For Real Estate ...
    Home & Auto

    How To Calculate ROI For Real Estate ...

  4. Finding And Investing In FHA Condos
    Investing Basics

    Finding And Investing In FHA Condos

  5. Ebola's Economic Impacts on Liberia, ...
    Economics

    Ebola's Economic Impacts on Liberia, ...

Trading Center