Housing Permits Up Double Digits for Second Month

(Positive) There were 107,600 housing permits filed in September 2016. In four of the last five months, permits were above 100,000. While the number of permits was still relaitvely low looking back over the last four decades, the level of permits is almost the highest since 2007. Comapred with one year ago, housing permits decreased 10.7 percent, which was the second month of growth in a row. Both months had double digit growth. The annual rate of growth accelerated to 2.9 percent, which was the second month in a row of accelerating growth. 

The change in the real 10-year treasury rate was negative for the fifth month in a row, while the overall trend of lower rates has been in place since the end of 2015. This is a likely cause for the increase in housing permits in August. Changes in the interest rate lead changes in housing permits and construction spending by about 12 months on average. In fact, housing permits seem to have bottomed six months after interest rates started falling year over year.