The indicator of future construction activity that measures permits issued for new housing units is building permits.
A building permit is an authorization issued by a local government or other permitting jurisdiction allowing construction to proceed under applicable codes and zoning rules. The Census Bureau aggregates these approvals into monthly building-permit statistics for new privately owned housing units in permit-issuing places.
Permits are considered an early signal because authorization generally comes before groundbreaking. However, a permit is not proof that a builder will start or finish a project: financing problems, changing market conditions, legal disputes, or cancellations can intervene. Census therefore reports permits separately from housing starts, units under construction, and completions.
The count also differs from construction spending, which measures the value of work put in place, and from home-builder confidence, which is a survey-based sentiment measure. Housing permits can cover single-family homes and units in multifamily buildings, with the number of units often more informative than the number of structures because one apartment building may contain many dwellings.