Housing Permits at Highest Level since June 2015

(Negative) There were 107,800 housing permits filed in May 2016. Comapred with one year ago, housing permits decreased 3.01 percent. This was the second month of contraction in a row. The annual rate of growth decelerated to 8.6 percent, which was the slowest rate of growth since May 2015. Just based on recent housing permit data, the annual rate of change will continue to decelerate in the upcoming months.

The real 10-year treasury rate actually decreased compared with one year ago in May. 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.