Head-to-head comparison
Building Permits vs Housing Starts
Building permits vs housing starts — which is the better leading housing signal?
Verdict
Building Permits wins
Permits precede starts by a month and are a component of LEI. Use permits for leading signal.
One-year comparison
Left axis: Building Permits (green) · Right axis: Housing Starts (blue)
The analysis
Both are monthly Census Bureau housing releases. Permits are authorizations (intent); starts are actual groundbreakings (commitment). Permits lead starts by roughly one month and are a component of the Conference Board LEI. Sustained YoY permit declines of 10%+ have preceded every recession since the 1960s.
Indicator A
Building Permits
Track U.S. residential building permits in real time. Declining permits are the most critical recession predictor per Moody's Analytics.
View indicator
Indicator B
Housing Starts
Track U.S. housing starts — a key leading indicator. Residential investment leads the business cycle by 3-5 quarters.
View indicator