Housing Permits Continued to Grow in August

There were 98,300 housing permits filed in August 2015. This broked a string of four months where housing permits were above 100,000. However, in only one month since August 2007 have housing permits been above the historical average. Comapred with one year ago housing permits were up 8.9 percent in August. This was the ninth consecutive month of growth. The annual rate of growth has accelerated three of the last four months, reaching 10.5 percent in August.

The 10-year treasury rate has begun a trend of rising rates compared with one year ago. This indicates that housing permits are likely near their peak rate of annual growth. The peak rate of growth will likely occur before the end of 2015 based on the trend in interest rates. 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.