The US housing sector

The US housing sector

The US housing sector provides us with multiple Economic indicators that can help us make decisions on whether we believe the US economy will likely grow or not. To predict the GDP growth, The Census Bureau’s Monthly Report on Building Permits is another important indicator. Most of the time, even professional traders and seasoned economists miss very important signals that the Building Permits data indicates. The Building Permits data can be downloaded from the given link:

https://www.census.gov/construction/bps/uspermits.html

The data is published on the 2nd or 3rd week of each month for the previous month.

Why Building Permits Data is Important

As the data comes from the housing starts report, it also includes a number for housing completions. Each term in the data has a different definition, and the order must be defined as per the occurrence when a new residential housing project is being built.

Building Permit Definition: The building has received planning permission from the local state planning department.

Housing Start Definition: The foundations of the building have been laid.

Housing Completion Definition: The home is being marketed for sale after major interior work and structure.

Why Building Permits Data is Important

Here are several facts that we get from the Building Permits data:

More applications for Building Permits mean an expectation of future sales. An application costs almost $500-$1000

The demand for housing from the consumers may eventually lead to a change in Consumer Sentiment and Consumer Spending

The supply of loans is also predicted as consumers in the US buy houses with mortgages

An extremely low level of permits historically has meant an extremely tight lending environment and predicts looser monetary policy, increased money supply, predict inflation, positive score, and short currency bias. Extremely high levels of permits indicate all the factors in the opposite manner.

Building Permits data indicate the liquidity and health of the US banking sector, and the change is consumer spending habits.