Tuesday, March 17, 2015

Ignore housing starts, housing permits were encouraging

 - by New Deal democrat

You don't need decent weather to get a housing permit.  You need decent (or at least not horrendous) weather to actually start building a house. That makes winter housing starts particularly volatile.

In general, housing starts (red in the graph below) are twice as volatile as housing permits (blue). I've squared the results so that they are all positive, making it easier to see the volatility:

That's why I focus on permits rather than starts.  Plus permits tend to lead starts by a month.  

So what is going on with permits?  Here they are in absolue terms:

And here is the YoY trend:

Housing permits in February were only exceed by last October.  And the YoY trend has turned up mildly.  So consider me unperturbed by the morning's housing starts miss, and encouraged by the good permits number.