There were 120,200 housing permits filed in November 2020. Permits filed in November increased 11.8% compared with one year ago. Housing permits grew five of the last six months and in four of those months, the growth was faster than 11.5%. In November, the annual rate of growth accelerated to 5.1%. November was the 16^th-straight month of growth and the eighth in the last 10 with growth faster than 5.0%.

The real 10-year Treasury rate, which is the nominal rate minus the rate of inflation, was -0.44%. This was the 11^th consecutive month and 14^th of the last 16 that the real rate was negative. However, the rate was grinding slowly higher since April.  November’s real rate was the highest since January.

In October, the year-over-year change in the real rate was -47 basis points. The change was negative for the 23^rd month in a row. The change was at its highest level since January. Since April, the trend in the year-over-year change in the real 10-year Treasury was less negative. A less negative change in the real rate is less stimulating to the economy, which is not what the Federal Reserve wants right now.

The change in the 10-year Treasury rate is a good leading indicator of housing permits and construction spending. An increasing year-over-year change in the real 10-year Treasury rate typically leads to decreases in housing permits.