Data through: September 2026 · updated Oct 20 · Updates: Monthly · Next: Nov 18
MThe three bars show the last 3 months for this indicator, oldest left to newest right. Bar height reflects each reading relative to the other two — the tallest is the highest of the three, the shortest the lowest.
↓ 0.4% MoM↓ 3.2% YoY
Historical context: Currently in the 52nd percentile of all historical readings.
What this means right now: Building permits are moderate — between 1,100K and 1,400K, the most common band: about 3 months in 10 since 1960 (245 of 801), around the long-run average of about 1,375K.
Building Permits · Monthly · 1960–2026
NBER recessions
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Monthly values
Building Permits — the last 12 months
Every month's reading, with the band the heatmap gives it. The chart above shows the same series in full.
Month
Value
Band
Sep 2026
1398K
Within normal range
Aug 2026
1403K
Healthy reading
Jul 2026
1433K
Healthy reading
Jun 2026
1374K
Within normal range
May 2026
1410K
Healthy reading
Apr 2026
1423K
Healthy reading
Month-end readings of the same series as the chart. Values are the current record, not point-in-time: a month that has since been revised shows its revised value.
What is the Permits?
Building permits measure the number of new residential construction projects authorized by local governments, reported at a seasonally adjusted annual rate (SAAR) in thousands. Because builders must obtain a permit before breaking ground, permits are the earlier stage of the same projects as starts. Month to month the two move together (a correlation of 0.40 in the same month, 0.16 a month later), and at turning points permits ran one to four months ahead in 2005, 2009 and 2022 but not in 1972 or 1978.
Housing construction is among the most interest-rate-sensitive parts of the economy: a rise in mortgage rates shows up in permits within a few months. Permits were at least a fifth below their two-year high when six of the nine recessions since 1960 began, but the warning has not been clean. The Housing Cycle page keeps the sector's own record. Single-family permits fell 15% from their peak 7 times since 1960, by the Housing Cycle's count. A recession followed within 24 months after 4 of them, and none after 3. On the dates that rule fired, 3 were followed by a recession, 2 came with one already under way, and 2 by none.
How We Color-Code the Permits
Our heatmap colors this indicator against historically significant thresholds:
900K or below
Very weak — 900K or below, about 1 month in 10 since 1960 (79 of 801). Reached only inside the 1974–75, 1980, 1981–82, 1990–91 and 2008–09 recessions or the month after one ended, through the 2009–2012 aftermath, and once in 1966
900K – 1,100K
Weak — 900K to 1,100K, about 1 month in 7 since 1960 (109 of 801); a recession was under way or began within a year in 42 of those months
1,100K – 1,400K
Moderate — 1,100K to 1,400K, the most common band: about 3 months in 10 since 1960 (245 of 801), around the long-run average of about 1,375K
1,400K – 1,600K
Healthy — 1,400K to 1,600K, about 1 month in 5 since 1960 (166 of 801); only 11 of those months fell inside a recession
Above 1,600K
Strong — above 1,600K, about 1 month in 4 since 1960 (202 of 801), in 1970–73, 1977–79, 1983–87, 1990, 1998–2006 and 2020–22. Only 1 of those months fell inside a recession
Historical Extremes — What Happened Next?
When this indicator reaches extreme levels, history shows consistent patterns:
Sep 2005Housing boom peak
2263K
The high of the boom on today's figures (on the figures first reported, January 2006's 2,217K was the high). Permits had more than halved by the time the 2008–09 recession began.
Mar 2009Post-Crisis Low
513K
The deepest fall on the record, which begins in 1960: 79% below the December 1972 all-time high (77% from the September 2005 peak). Permits did not reach 1,000K again until April 2013.
Jan 2022Post-COVID Peak
1923K
The pandemic-era peak. Permits fell 27% to 1,398K by December 2022 as the 30-year mortgage rate rose from 3.4% to 6.9%.
Frequently Asked Questions
What are building permits?
Building permits are government authorizations required before starting residential construction. They are measured at a seasonally adjusted annual rate (SAAR) — meaning the monthly count is adjusted for seasonal patterns and multiplied to estimate the annual pace. A reading of 1,400K means 1.4 million homes are being permitted annually.
Why are building permits a leading indicator?
Permits come before groundbreaking, but in the monthly data permits and starts move together rather than months apart. Against the economy the lead is real but irregular: permits peaked between 4 and 32 months before each of the 9 recessions since 1960 (the median 12 months). They were down at least a fifth (20%) from that peak when 6 of those recessions began. Housing construction employs millions of workers, generates demand for materials, and drives spending on appliances and furniture.
How do interest rates affect building permits?
Higher mortgage rates reduce affordability, buyer demand softens, and builders pull back. When the 30-year rate went from 3.4% in January 2022 to 6.9% by October, permits fell from 1,923K in January 2022 to 1,398K in December — a fall of 27% (30% on the figures first reported).
What is a normal level of building permits?
There is no official line. Since 1960 the series has averaged about 1,375K, and about 1 month in 3 has sat between 1,200K and 1,500K (274 of 801). The site holds no measure of household formation or of any housing shortfall, so it does not say what level demand needs.
Why did building permits collapse in 2008-2009?
The housing bubble burst: home prices fell, buyers disappeared and credit froze. Permits fell from 2,263K in September 2005 to 513K in March 2009 — a 77% collapse (on the figures first reported, from 2,217K in January 2006 to 494K in April 2009, 78%). The recovery was slow: permits did not reach 1,000K again until April 2013, four years after the trough. They stayed at or below 1,400K in 135 of the 201 months since 2010.