Housing data: starts, permits and new home sales explained

Housing is one of the most interest-rate-sensitive and cyclical parts of the economy. Building a home requires land, labor, materials and, usually, a mortgage on the buyer's side, so higher borrowing costs show up in housing early, and a downturn in construction has preceded many US recessions. Two monthly reports from the Census Bureau, released jointly with the Department of Housing and Urban Development (HUD), track it: New Residential Construction (building permits, housing starts and completions) and New Residential Sales (new home sales, inventory and prices).

They are also among the noisiest major indicators. Monthly changes often fall inside confidence intervals of more than ±10%, and the Census Bureau itself says it can take months to establish a trend. Reading them well means understanding the definitions, the annual rates and the margins of error.

This guide explains what each series measures, how a report is read, what the history since 1960 shows, and where housing data mislead.

The two reports and what they cover

Both reports cover new, privately owned housing units, excluding "HUD-code" manufactured (mobile) homes. They draw on two Census surveys: the Building Permits Survey, which collects permits from local permit-issuing offices, and the Survey of Construction, which follows a sample of units from permit to sale or completion and is partly funded by HUD.

New Residential Construction reports, for single-family homes and for buildings with two to four and five or more units:

• Building permits: units authorized by local permits.
• Housing starts: units on which construction began.
• Under construction and authorized but not started.
• Housing completions: units finished.

New Residential Sales covers new single-family houses only:

• Houses sold in the month.
• Houses for sale at month-end, at any stage of construction.
• Months' supply: houses for sale ÷ the monthly sales rate.
• Median and average sales prices.

Sales of existing homes, the large majority of home sales, are not in either report. They are tracked by private organizations, notably the National Association of Realtors.

The definitions that matter

From the Census Bureau's Survey of Construction definitions:

• Start: construction starts "when excavation begins for the footings or foundation of a building."
• Completion: a house is completed when all finished flooring has been installed.
• Sold: a house counts as sold when a sales contract has been signed or a deposit accepted.
• For sale: a house is for sale when it is being built to be sold and a permit has been issued.

The definition of a sale has a consequence the Bureau spells out: because a sale can occur before a permit is issued, and the survey samples houses from permits, the sales estimate includes an estimate of such early sales. That is one reason new home sales are revised heavily.

When they come out

New Residential Construction is released at 8:30 a.m. Eastern in the second half of the month: September 2026 data came out on October 20, 2026, and October's are scheduled for November 18. New Residential Sales follows about a week later, at 10:00 a.m. Eastern: September data on October 27, 2026, October data on November 25.

Reading the numbers: annual rates and confidence intervals

Like GDP, the headline figures are seasonally adjusted annual rates (SAAR): what the year's total would be if the month's adjusted pace continued for twelve months.

Because the figures come from samples, each percentage change is published with a 90% confidence interval. An asterisk marks changes whose interval includes zero: the Bureau can't say whether there was an increase or a decrease.

So the 5.2% monthly drop in starts, which might make a headline, is statistically indistinguishable from no change. The 14.0% annual fall in completions is significant. The Bureau adds that preliminary seasonally adjusted totals for permits, starts and completions are revised by 3.8% or less on average, and that it may take three months to establish an underlying trend for permits, six months for starts and six months for completions.

None of the monthly or annual changes in sales or the median price were statistically significant. The average being far above the median, $472,800 against $400,400, reflects a minority of high-priced homes pulling the mean up; the median is the usual figure quoted.

Why permits come first

The sequence runs permit → start → completion, with sales possible at any point. Permits are usually issued shortly before construction begins, so they tend to lead starts, and both lead completions by many months (multifamily buildings take much longer to finish than single-family homes). That is why permits are part of many composite leading indicators; see Leading, lagging and coincident indicators: what turns first.

The chart shows the two moving almost in step, with permits slightly ahead at turning points. In the last housing boom, permits peaked at 2,263,000 in September 2005, four months before starts peaked at 2,273,000 in January 2006. Starts then fell to 478,000 in April 2009, a drop of 79% and the lowest in the series, which starts in 1960. Permits bottomed a month earlier, at 513,000 in March 2009.

The record high for starts is older: 2,494,000 in January 1972. The average from 1960 to 2025 was about 1.43 million a year. In 2026 starts have ranged from 1,182,000 (May) to 1,522,000 (March) at annual rates, a reminder of how much a single month can move.

New home sales and prices

The sales line is even more cyclical than starts. New home sales peaked at 1,389,000 in July 2005 and fell to 270,000 in February 2011, a decline of 81%. They rebounded to 1,031,000 in October 2020 and were 676,000 in September 2026.

The price panel uses the Census Bureau's quarterly median sales price of new houses sold, a different series from the monthly median in the press release. The median peaked at $442,600 in Q4 2022. In Q3 2026 it was $393,300, 11.1% below that peak and 4.1% below a year earlier. In the bust, the median fell from $257,400 in Q1 2007 to $208,400 in Q1 2009, a drop of 19%.

A median price is not a house price index. It changes when the mix of homes sold changes: if builders shift toward smaller homes, or toward cheaper regions, the median falls even if the price of any given home does not. Repeat-sales indexes, which compare the same houses over time, are better for measuring price change.

How markets read housing data

Housing reports usually move broad markets less than jobs or inflation data, partly because of their wide margins of error. They matter most for:

• Homebuilder stocks and the businesses around them: building materials, home improvement retailers, mortgage lenders.
• The rate outlook. Housing is where tighter monetary policy shows up first, because mortgage rates follow long-term Treasury yields. A sustained slump in starts and sales is one sign that higher rates are biting; see The 10-year Treasury yield: why it matters and what drives it and How interest rates affect stocks: discount rates and equity duration.
• GDP. New home construction is part of residential investment in GDP, and sales of new homes drive spending on furnishings and appliances; see GDP explained: how gross domestic product is measured and read.

Because single months are so noisy, analysts usually look at three-month averages, single-family figures (which are less volatile than multifamily), and the direction of permits.

Pitfalls and limitations

• Wide confidence intervals. Monthly changes in starts and sales are often within ±10–14%. An asterisked change may be no change at all.
• Big revisions. New home sales are revised about 6.7% on average after the first print; check the prior months' revisions in each report.
• Annual rates exaggerate. A SAAR of 676,000 is about 56,000 homes in the month.
• Multifamily lumpiness. A few large apartment projects can swing total starts and permits; single-family data are steadier.
• Weather. Storms and unusually cold or wet months delay starts, and seasonal adjustment can't fully remove one-off weather; see Seasonal adjustment and data revisions: why the numbers change.
• New homes only. Most home sales are of existing homes, which these reports don't cover.
• Median ≠ price index. The median sales price shifts with the mix of homes sold.

Housing indicators compared

Housing's place in the wider cycle is covered in The business cycle: expansions, peaks, recessions and troughs.

How Finabase does it

Finabase does not publish housing data, mortgage rates or an economic calendar. The charts and figures on this page are ours, built from Census Bureau and HUD data distributed through the St. Louis Fed's FRED database and from the September 2026 releases.

The app shows the markets housing data move. Homebuilder ETFs have their own pages, such as the iShares U.S. Home Construction ETF (ITB) and the SPDR S&P Homebuilders ETF (XHB), with quotes and charts. The 10-year Treasury yield, which mortgage rates tend to follow, is on its own page and in the Treasury yield table. The Real estate sector page lists the S&P 500's real estate stocks, mostly REITs that own and lease property rather than build homes.

Frequently asked questions

What is a housing start?

A housing start is counted when excavation begins for the footings or foundation of a building containing new privately owned housing units. Starts are reported for single-family homes and for buildings with two to four and five or more units.

Why do building permits matter?

Permits are issued before construction begins, so they usually lead starts and are an early sign of where construction is heading. The Census Bureau says permits need about three months to establish a trend, compared with six for starts.

Are housing starts reported as annual rates?

Yes. Starts, permits, completions and new home sales are all reported as seasonally adjusted annual rates. September 2026's 1,221,000 starts is the pace a full year would reach if the month's adjusted rate continued.

When is a new home counted as sold?

When a sales contract is signed or a deposit is accepted, which can happen before construction starts or even before a permit is issued. Closings are not what the report counts.

Why is the median new home price falling while prices seem high?

The median changes with the mix of homes sold as well as with prices. A shift toward smaller or cheaper homes lowers the median even if prices for comparable homes are unchanged. In September 2026 the monthly median was $400,400, and its year-over-year decline of 3.9% was not statistically significant.

Summary

The Census Bureau and HUD's two monthly housing reports track new homes from permit to start to completion, and new single-family homes from contract to price. All headline figures are seasonally adjusted annual rates with wide confidence intervals: September 2026's 5.2% fall in starts, to 1,221,000, was statistically insignificant. Permits lead starts, which is why they matter as an early signal; starts fell 79% and new home sales 81% in the last housing bust. Read three-month averages, focus on single-family figures, check revisions and confidence intervals, and remember that these reports cover new homes only and that the median price moves with the mix of homes sold.