US housing starts sank 5.3 percent in September

FILE- In this Oct. 10, 2018, file photo construction continues on 1 Seaport, center, an apartment tower in New York's financial district. On Wednesday, Oct. 17, the Commerce Department reports on U.S. home construction in September. (AP Photo/Mark Lennihan, File)
FILE- In this Aug. 30, 2018, file photo a workers toil on a new home under construction in Denver. On Wednesday, Oct. 17, the Commerce Department reports on U.S. home construction in September. (AP Photo/David Zalubowski, File)

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.

Must Read

US new-home sales climb to best level since late...

Aug 23, 2016

US sales of new homes soared 12.4 percent in July to best level since October 2007

The hidden risk to the economy in corporate...

Aug 24, 2016

America has a debt problem, and the big borrower this time may surprise you: Corporate America

Stocks end mostly lower after Yellen speech

Aug 26, 2016

Stocks end mostly lower, giving up earlier gains after Fed Chair Yellen said the case for raising...

Yellen suggests rate hike is coming but offers no...

Aug 26, 2016

Yellen says 'the case for an increase' in rates has strengthened but offers no timetable

AP FACT CHECK: Trump on immigration

Sep 1, 2016

AP FACT CHECK: Trump's day of clarification on immigration policy did not always hew to the actual...

Sign up now!

About Us

In The Headline sought to bring professionalism back into journalism, bringing you only the most exclusive and the most impactive news from all over the globe.

Contact us: sales[at]intheheadline.com