There were 160,600 housing permits filed in April 2021, which was the highest total since August 2006. This is leading to strong growth in the appliance and off-road/construction machinery industries, in particular. Interestingly, permits for single-family homes were down slightly from last month while permits for multi-family homes and apartment complexes continued to increase. 

Permits filed in April increased 67.3% compared with one year ago, which was the fastest rate of growth since August 1983. The rate of growth was helped by an easy comparison with April 2020, but even with a more normal level of permits in April 2020, permits still would have grown about 33% in April. Housing permits grew 10 of the last 11 months, and in nine of those months, the growth was faster than 11.5%.

Regarding the annual rate of change, March was the 21^st straight month of growth and the 13^th in the last 15 with growth faster than 5.0%. The annual rate of growth accelerated to 15.3%, which was its fastest rate of growth since March 2014.

While the increase in the nominal 10-year Treasury rate moderated in April, the real 10-year Treasury rate was falling to its lowest rate since July 1980. The reason for this was that the rate of inflation increased to 4.16% in April, which was the highest rate of inflation since August 2008. As the real 10-year Treasury rate is the nominal rate minus the inflation rate, the real 10-year Treasury rate was -2.52% in March. This is very stimulative to the economy.

The year-over-year change in the real 10-year Treasury was more negative for the second month in a row. The change was negative for 19 of the last 21 months, falling to its lowest level since November 2011.

The change in the 10-year Treasury rate is a good leading indicator of housing permits and construction spending. A decreasing year-over-year change in the real 10-year Treasury rate typically leads to increases in housing permits.