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.

  1. Does an FHA loan require a down payment?

    Federal Housing Administration (FHA) loans require down payments, which can be as low as 3.5% of the total purchase price ... Read Full Answer >>
  2. Do FHA loans have closing costs?

    Because Federal Housing Administration (FHA) loans are provided by financial institutions, taking out an FHA loan entails ... Read Full Answer >>
  3. How is market value determined in the real estate market?

    Anyone who has ever tried to purchase or sell a home has probably heard a lot about the property's fair market value, or ... Read Full Answer >>
  4. What economic indicators are important to consider when investing in the retail sector?

    The unemployment rate and Consumer Confidence Index (CCI) rank as two of the most important economic indicators to consider ... Read Full Answer >>
  5. What is the difference between adjusted and regular funds from operations?

    While regular funds from operations measures the cash flow generated by the operations of a real estate investment trust ... Read Full Answer >>
  6. What are examples of typical leasehold improvements?

    Typical leasehold improvements include partitioning a large, open space into smaller, more structured areas such as dressing ... Read Full Answer >>
Related Articles
  1. Investing Basics

    Investing In Real Estate Versus REITs

    Article on Real Estate Investing Versus REITs.
  2. Home & Auto

    3 Ways To Value Real Estate Investments

    Investing in income-generating real estate involves market data and a degree of subjectivity.
  3. Home & Auto

    How To Calculate ROI For Real Estate Investments

    Calculating return on real estate investments can be difficult. We help you figure it out.
  4. Retirement

    Using Your IRA to Invest in Property

    Explain how to use an IRA account to buy investment property.
  5. Home & Auto

    7 Absolute No-Nos When Selling a Home

    Avoid these mistakes if you’re looking to make a quick and easy home sale.
  6. Home & Auto

    Economics of Owning a Rental Property

    Learn how to find suitably priced rental property and the right rent level. Determine what maintenance costs to expect and what tax breaks are available.
  7. Economics

    Long-Term Investing Impact of the Paris Attacks

    We share some insights on how the recent terrorist attacks in Paris could impact the economy and markets going forward.
  8. Credit & Loans

    HARP Loan Program: Help for Underwater Mortgages

    If you are underwater on your mortgage, this program may be just what you need to help build up equity in your home.
  9. Economics

    5 States with the Highest GDP Per Capita

    Learn about the top five states ranked by their real gross domestic product (GDP) per capita as of 2014: Alaska, North Dakota, New York, Connecticut and Wyoming.
  10. Home & Auto

    Should You Buy A House At Auction?

    In theory, many of the best properties are auctioned. But auctioned properties aren’t always hidden gems.
  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. Private Equity Real Estate

    A Definition of "Private Equity Real Estate" and how it applies ...
  4. Capitalization Rate

    The rate of return on a real estate investment property based ...
  5. Real Estate Investment Trust - REIT

    A REIT is a type of security that invests in real estate through ...
  6. Proprietary Reverse Mortgage

    A loan that lets senior homeowners retrieve the equity in their ...

You May Also Like

Hot Definitions
  1. Turkey

    Slang for an investment that yields disappointing results or turns out worse than expected. Failed business deals, securities ...
  2. Barefoot Pilgrim

    A slang term for an unsophisticated investor who loses all of his or her wealth by trading equities in the stock market. ...
  3. Quick Ratio

    The quick ratio is an indicator of a company’s short-term liquidity. The quick ratio measures a company’s ability to meet ...
  4. Black Tuesday

    October 29, 1929, when the DJIA fell 12% - one of the largest one-day drops in stock market history. More than 16 million ...
  5. Black Monday

    October 19, 1987, when the Dow Jones Industrial Average (DJIA) lost almost 22% in a single day. That event marked the beginning ...
  6. Monetary Policy

    Monetary policy is the actions of a central bank, currency board or other regulatory committee that determine the size and ...
Trading Center