There were 154,600 housing permits filed in August 2021, which was 22.5% more than the number of permits filed one year ago. While the rate of growth was much faster than in July, it was still slower than the growth in March through June. August had the third highest level of permits since August 2006 (only March and April 2021 were higher).

Regarding the annual rate of change, August was the 24^th straight month of growth. The annual rate of growth accelerated to 21.7%, which was the fastest rate of growth since October 2013.

As the real 10-year Treasury rate is the nominal rate minus the inflation rate, the real 10-year Treasury rate was -3.97% in August, which was just 8 basis points higher than last month. While the nominal 10-year Treasury rate was down slightly, the real 10-year Treasury rate was slightly less negative due to a very slight decrease in the rate of inflation. Instead of pushing nominal rates into negative territory, the Fed is using higher inflation to make real rates negative. This is very stimulative to the economy.

The year-over-year change in the real 10-year Treasury, now -331 basis points, was slightly less negative for the second month in a row. However, the change was still quite negative and indicating further expansion in manufacturing.

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.