U.S. housing starts fell 5.2% in September to an annualized rate of 1.22 million, the second-lowest level in six years, according to the Census Bureau.
- The decline surprised economists, who had expected a modest 0.9% increase following August’s reading.
Why it matters: Homebuilders continue to pull back on new construction as elevated mortgage rates, affordability challenges and sluggish buyer demand weigh on the housing market.
- Building permits, a leading indicator of future construction, slipped 0.2% to an annualized rate of 1.4 million, slightly better than the 0.7% decline economists expected.
- Permits have remained in a narrow range since March.
The bright spot: Housing completions increased 2.2% to 1.192 million annually, although that remains the second-lowest level in six years.
The bottom line: Residential construction remains under significant pressure, with little evidence of a meaningful rebound as builders navigate weak demand and challenging affordability conditions.