Housing Permits Grow for Fifth Month

The annual rate of change in housing grew at an accelerating rate for the third month in a row.

There were 107,500 housing permits filed in November 2019. This was the lowest level for housing permits since March 2019. However, permits in November 2019 were 6.4% higher than they were in November 2018. Therefore, November was the fifth consecutive month of growth in housing permits.

In November, the annual rate of change accelerated to 2.4%, which made it the third-straight month of accelerating growth. The annual rate of growth will likely continue to accelerate in the months ahead, as the three-month rate of change was faster than 13% for the second month in a row.

The trend in the 10-year Treasury rate is indicating growth in housing permits, too. In November, the year-over-year change in the real 10-year Treasury rate was -0.63%, which was the 11th month in a row that the change was negative, meaning the rate dropped from what it was one year ago.

The change in the 10-year Treasury rate is a good leading indicator of housing permits and construction spending. A decreasing year-over-year change in the real 10-year Treasury rate should lead to increases in these data points down the line.

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