Housing Permits Weaken in 2016 2Q
(Negative) There were 114,00 housing permits filed in June 2016. Comapred with one year ago, housing permits decreased 15.0 percent. This was the third month of contraction in a row. The annual rate of growth decelerated to 3.1 percent, which was the slowest rate of growth since November 2011. Just based on recent housing permit data, the annual rate of change will continue to decelerate in the upcoming months and will likely start to contract before the year is over.
The real 10-year treasury rate was 0.96 percent in June 2016, falling below 1 percent for the first time since April 2015. Since the Fed announced it was raising its overnight rate, the real 10-year treasury rate has dropped each of the last seven months. Falling rates typically indicate accelerating growth in housing permits. 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.blog comments powered by Disqus