With the release of the new residential construction data for January on February 19, 2025, the Building Permits Survey will make adjustments to the attribution methodology. The current operation calculates reference factors by region and the new operation will calculate factors in a combination of sections and large individual states. For more details on this change, see our attribution section of our methodology page.
December 18, 2024 – The U.S. Census Bureau and the U.S. Department of Housing and Urban Development jointly announced the following new residential construction statistics for November 2024:
Building Permits
Privately owned housing units authorized under building permits in November were at a seasonally adjusted annual rate of 1,505,000.This is 6.1 percent higher than the revised October rate of 1,419,000, but 0.2 percent lower than the November 2023 rate of 1,508,000. The rate of single family housing construction permits in November was 972,000; this is 0.1 percent higher than October’s revised figure of 971,000. The average unit license rate in buildings with five or more units was 481,000 in November.
Start of housing construction
The start rate for privately owned housing construction in November was a seasonally adjusted annual rate of 1,289,000. This is 1.8 per cent (±10.6 per cent)* lower than the revised estimate for October of 1,312,000 and 14.6 per cent (±11.7 per cent) lower than the November 2023 rate of 1,510,000. The November start rate for single family housing was 1,011,000; this is 6.4 percent (±10.8 percent)* higher than October’s revised figure of 950,000.
Housing Completions
The rate of privately owned housing completion in November was 1,601,000 units per year after the seasonal adjustment. This is 1.9% (±9.2%) lower than the revised estimate for October of 1,632,000 units, but 9.2% (±12.9%)* higher than the November 2023 rate of 1,466,000 units.
Analysis of housing statistics in November and interpretation of changes
When interpreting changes in statistics in this release, note that monthly changes in seasonally adjusted statistics often show movements that may be erratic. It may take three months to determine the baseline direction for building permits, six months for total start-ups, and six months for total completions. Statistics in this release are based on a non-probability sample and are not subject to sample error. However, they are still prone to non-sample error.
The overall quantitative response rate for these estimates is 76.4%. The statistics in Tables 2-5 are estimated in this version of the sample surveys and are prone to sample variability as well as non-sample error including bias and variation from response, non-reporting, and lack of coverage. Estimated relative standard errors for the most recent data appear in tables.
The November Family Housing Completion Rate was 1,038,000 units, which is 3.3% (±8.7%)* higher than the adjusted October rate of 1,005,000 units. The November average for units in buildings with five or more units was 544,000 units.
Whenever a phrase like “2.5 percent (±3.2 percent) above” appears in the text, it indicates the range (-0.7 to +5.7 percent) in which the actual relative change is most likely to occur. All ranges given for relative changes are 90 percent confidence intervals and represent only sample variance. If the range does not contain zero, the change is statistically significant. If it contains zero, the change is not statistically significant, i.e. it is uncertain whether there is an increase or decrease. The same policies apply to confidence intervals for relative changes described in the tables. On average, seasonally adjusted preliminary estimates for total building permits, housing start-ups, and housing completion are adjusted by 2.2 percent or less. Explanations for confidence intervals and sample variability can be found on our website.
The Impact of U.S. Building Permit Volatility on Fed Policy
Changes in housing construction start data provide the Fed with valuable information about the health of the economy and may influence its interest rate decisions, though they represent just one factor among many that the Fed considers. The start of housing construction closely links to economic growth, consumer sentiment, and inflation, all of which are key considerations for the Fed when determining monetary policy.
Here’s how fluctuations in housing construction starts can affect the Fed’s policy decisions:
Indicator of the health of the economy
High start of housing construction: When you increase the start of housing construction, this usually indicates the growth of the economy. He notes that consumers and businesses are confident and that there is strong demand for housing, which could reflect broader economic growth. If the economy is growing too fast, it can lead to inflationary pressures. In this scenario, the Fed may raise interest rates to calm inflation and prevent the economy from overheating.
Low start of housing construction: A low start of housing construction may indicate an economic slowdown or low consumer confidence, especially if it occurs in conjunction with other signs of weakness (such as lower consumer spending or business investment). If this happens, the Fed may cut interest rates to stimulate the economy by encouraging borrowing, spending, and investment.
Housing as a leading economic indicator
The start of housing construction is a leading indicator, which means that it often precedes broader economic trends. The housing market is very sensitive to interest rates, as price changes directly affect mortgage costs and housing affordability. If housing starts fall due to higher prices or a tightening credit environment, this could indicate that the economy may face a slowdown in the near future, which could prompt the Fed to ease policy (i.e., cut interest rates).
