There were 117,200 housing permits filed in February 2020, which was the highest total for February since 2006 (permits are seasonal). Permits filed in February increased 17.0% compared with one year ago. Housing permits grew eight of the last nine months, and in seven of those months, the growth was faster than 11.5%.
Regarding the annual rate of change, February was the 19th-straight month of growth and the 11th in the last 13 with growth faster than 5.0%. The annual rate of growth accelerated to 6.3%, which was its fastest rate since of growth July 2020.
The real 10-year Treasury rate, which is the nominal rate minus the rate of inflation, was 0.17%. The nominal rate is rising faster than the rate of inflation, which was 1.68% in February, according to the CPI. February was the first month since December 2019 that the real rate was above 0%.
In February, the year-over-year change in the real rate was 63 basis points, which was the second month in a row that the change was positive and growing. Also, this was the highest level for the year-over-year change in the real rate since March 2016.
The change in the 10-year Treasury rate is a good leading indicator of housing permits and construction spending. An increasing year-over-year change in the real 10-year Treasury rate typically leads to decreases in housing permits.
