Housing Permits Contract for First Time since November 2014
There were 96,800 housing permits filed in October 2015. This was the fewest housing permits filed since March 2015. And, in only one month since August 2007 have housing permits been above the historical average. Comapred with one year ago housing permits were down 1.3 percent in October. This was the time permits contracted since November 2014. The annual rate of growth, now 9.0 percent, decelerated for the second month in a row to its slowest rate since of growth since May 2015. It appears that rising real interest rates are starting to impact housing permits.
The 10-year treasury rate has begun a trend of rising rates compared with one year ago. It appears that housing permits have hit their peak rate of growth. Changes in the interest rate lead changes in housing permits and construction spending by about 12 months on average.
We use housing permits as an early leading indicator for the following industries: appliances; custom processors; furniture; hardware; HVAC; off-road/construction machinery; petrochemical processors; plastics; plastic/rubber products; pumps/valves/plumbing products; textiles/clothing/leather goods; and wood/paper products.
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