January's housing permit increase was not shared by the single-family category. The February 16, 2017 Census and HUD release estimated total privately owned U.S. housing authorizations at a seasonally adjusted annual rate of 1,285,000 units, up 4.6 percent from revised December. The 90 percent sampling margin around that percentage change was 2.0 percentage points. [nrc_201701]
Single-family permits ran at an annualized rate of 808,000 units, down an estimated 2.7 percent with a 1.9-percentage-point 90 percent sampling margin. Our market reading is that an aggregate increase cannot substitute for the category relevant to a project. These figures count authorized housing units at an annualized pace, not buildings sold, profits earned or homes completed during January. [nrc_201701]
The starts series shows a second danger: choosing a convenient baseline. The January 19 report initially estimated December starts at a seasonally adjusted annual rate of 1,226,000 units. February revised December to 1,279,000, against January's 1,246,000. Its estimated minus 2.6 percent monthly change had a 90 percent sampling margin of 11.0 percentage points; the direction remained statistically uncertain. [nrc_201701][nrc_201612]
Both releases come from one Census/HUD program, rather than separate evidence about investment demand. The contrast between total and single-family authorizations raises a composition question, not a recommendation to buy or build. Sampling margins do not cover every error, and permits remain distinct from completed supply. These reports do not establish prices, project returns, policy causation or an improvement in housing affordability. [nrc_201701][nrc_201612]
Source documents
- CB17-23: Monthly New Residential Construction, January 2017https://www.census.gov/construction/nrc/pdf/newresconst_201701.pdf
- CB17-09: New Residential Construction in December 2016https://www.census.gov/construction/nrc/pdf/newresconst_201612.pdf