US housing starts sank 5.3 percent in September

WASHINGTON — U.S. home construction fell 5.3 percent in September, a sign that recent hurricanes and rising mortgage rates may be weighing on the market.

The Commerce Department said Wednesday that housing starts slipped last month to a seasonally adjusted annual rate of 1.2 million, down from 1.27 million in August. So far this year, starts have increased 6.4 percent. But the pace of homebuilding has downshifted since May

September ground breakings were also likely hurt by Hurricane Florence striking North Carolina — and ground breakings could possibly be depressed in October after Hurricane Michael hit the Florida panhandle.

"Starts are stagnating as the housing market slows, though September's numbers were suppressed by the hurricane affecting the Carolinas," said Tendayi Kapfidze, chief economist at Lending Tree, an online loan broker.

Homebuyers are facing new cost pressures that could be dampening demand.

Mortgage buyer Freddie Mac says that the average 30-year fixed-rate mortgage jumped to 4.9 percent last week, the highest level since 2011. The combination of higher borrowing costs and rising home values has made home ownership less affordable.

"It may be tempting to draw national conclusions from these storm-related dips and rallies, but the regional blips can't obscure the year-long malaise in the national single-family home construction market: Starts have been hit or miss, sales flat and permits trending downward for months," said Aaron Terrazas, a senior economist at the real estate firm Zillow.

Builders appear to be adapting to the affordability challenges. Starts for multi-family buildings such as apartments have increased at a faster clip than single-family houses year to date.

Still, much of September's decline came from a decline in ground breakings for multi-family buildings.

Housing starts fell last month in the South and Midwest, but they increased in the Northeast and West. The construction data can be volatile, so the regional levels of homebuilding can change sharply on a monthly basis.

Permits, an indicator of future activity, fell 0.6 percent to an annual rate of 1.24 million.

You may also like these

Qantas bends to Beijing by describing Taiwan as...

Jun 5, 2018

Australia's foreign minister has expressed concern at Qantas Airways' decision to describe Taiwan...

Huawei executive warns Australia risks economy...

Jun 27, 2018

A Huawei executive says Australia could damage its economic future if it bans the Chinese...

EU foreign policy chief wants quick Australian...

Aug 8, 2018

The European Union's foreign policy chief, Federica Mogherini, says she wants a free trade...

Global stocks, oil turn lower ahead of Fed meeting

Aug 22, 2016

Major stock markets and the price of oil turned lower on Monday as investors looked ahead to the...

China promises cooperation on steel at global...

Sep 5, 2016

China promises cooperation on steel at global summit amid pressure for trade curbs

Search
Financial Markets

About Us

Established in 2015, The Upstocker provides insights on financial reports, commentary, and investment data to traders so that you can make better investment decisions.

Contact us: sales[at]theupstocker.com

Subscribe Now!