Single-Family Housing Starts Dropped to Two-Year Low in September
Home builders slowed their pace of new construction in September as higher interest rates continued […]
Home builders slowed their pace of new construction in September as higher interest rates continued to price out a growing share of would-be buyers.
U.S. housing starts fell 8.1% to a seasonally adjusted annual rate of 1.439 million units in September, while single-family home projects dropped 4.7% to an annual rate of 892,000, the lowest level since May 2020, Reuters reports. As mortgage rates reached a 20-year high and supply chain disruptions posed extended challenges for builders, permits issued for new single-family houses fell 3.1% in September to the lowest level recorded since June 2020.
Buyers facing a series of affordability hurdles are driving down demand in the housing market, a slower pace of new construction signals a shift in builder sentiment in response.
“We expect starts to moderate further in (the fourth quarter) to … 1.420 million from 1.461 million” in the third quarter, Nancy Vanden Houten, lead U.S. economist at Oxford Economics, wrote. “The risk, however, is for a slower pace of starts, given the weak handoff at the end of Q3 and pessimism among homebuilders who are seeing buyers retreat to the sidelines at a time when they continue to face elevated cost pressures.”
