US housing starts sank 5.3 percent in September

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)
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)

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

AP Explains: Brazil's president under impeachment...

Aug 28, 2016

AP Explains: The trial to remove Brazilian President Dilma Rousseff from office is about more than...

Clinton could face mounting problem with health...

Aug 29, 2016

Double-digit premium increases and exits by big-name insurers raise new questions about 'Obamacare'

Iowa at center of debate over 'shadow insurance'...

Aug 30, 2016

Life insurance companies are setting up "shadow insurers" to take on some of their liabilities and...

US average 30-year mortgage rate rises to 3.46...

Sep 1, 2016

Long-term U.S. mortgage rates rose this week amid expectations in financial markets that an...

Stocks rise as US jobs report puts Fed rate hike...

Sep 2, 2016

Stock rose and the dollar fell on Friday after a key report showed the U.S. economy added slightly...

About Us

The World Insiders brings you exclusive coverage from across the globe in a timely, easy to consume format sourced directly from our regional media partners.

Contact us: sales[at]theworldinsiders.com

Subscribe Now!