There were 124,000 housing permits filed in June 2020. Permits filed in June were up 11.7% compared with one year ago, returning to double-digit growth after two months of contraction. The growth is likely a result of people moving from cities to suburbs as a result of the pandemic. In June, the annual rate of growth accelerated to 6.2%, which made it the 10^th-straight month of growth. It was the second-fastest rate of annual growth since July 2018.

The real 10-year Treasury rate, which is the nominal rate minus the rate of inflation, was -0.84%. This was the sixth consecutive month and ninth of the last 11 that the real rate was negative. Inflation was relatively low from April to June compared with the previous four years. However, inflation did pick up significantly in June.

In June, the year-over-year change in the real rate was -83 basis points. The change was negative for the 18^th month in a row. However, the change was less negative for the second month in a row. In general, the trend in the year-over-year change in the real 10-year Treasury was moving down (more negative) in the last six years. In order for that trend to continue, the rate of inflation needs to accelerate.

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 typically leads to increases in these data points down the line.