September housing starts fall short of forecasts
Starts fell to a 1.221 million annual pace, short of a 1.305 million forecast, though the Census Bureau did not call the decline from August statistically significant.
Key takeaways
U.S. housing starts missed forecasts in September, falling to a seasonally adjusted annual rate of 1.221 million, the U.S. Census Bureau and the U.S. Department of Housing and Urban Development said at 8:30 a.m. ET Tuesday, Oct. 20, 2026. The figure is a yearly pace, adjusted for the typical seasonal pattern, not the number of homes started in September.
A survey of forecasters published by Econoday had expected 1.305 million. The report was 84,000 below that rate, and 5.2% under August's revised rate of 1.288 million.
The Census Bureau said the 5.2% decline from August is not statistically significant. The 90% confidence interval around it is plus or minus 11.8%, a range from a 17% decline to a 6.6% increase, and the bureau calls a change significant only when that interval excludes zero.
Building permits, the approvals that come before a start, were 1.4 million, 0.2% below August's revised rate and 15,000 above Econoday's 1.385 million consensus. Permits for single-family houses fell 4% from August, to 845,000.
By 9:56 a.m. ET, iShares U.S. Home Construction ETF ITB was up 2.1%, and State Street SPDR S&P Homebuilders ETF XHB was up 1.5%.
Double-digit declines for ITB and XHB
- ITB
- XHB
- 3-month
- ITB −10.5%
- XHB −11.1%
- 6-month
- ITB −15.1%
- XHB −14%
- 1-year
- ITB −17.4%
- XHB −12.1%
A day earlier, the National Association of Home Builders said the NAHB/Wells Fargo Housing Market Index fell three points to 29, the lowest reading since June 2012. Freddie Mac's weekly U.S. survey put the average 30-year fixed mortgage rate at 7.40% as of Oct. 15.
"Mortgage rates have climbed well above 7% in recent weeks, and higher gas prices and inflation have further weakened buyer traffic across much of the country," NAHB Chairman Bill Owens said Monday.
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Frequently asked questions
How far short of forecasts were September housing starts?
Starts ran at a 1.221 million annual pace, 84,000 below the 1.305 million Econoday forecast and 5.2% under August's revised 1.288 million rate.
Was the decline from August statistically significant?
No, the Census Bureau said the 5.2% drop was not significant because the 90% confidence interval, plus or minus 11.8%, includes zero.
What did building permits show?
Permits were 1.4 million, 0.2% below August and 15,000 above the Econoday consensus, while single-family permits fell 4% to 845,000.
How did homebuilder ETFs trade after the report?
By 9:56 a.m. ET, iShares U.S. Home Construction ETF was up 2.1% and State Street SPDR S&P Homebuilders ETF was up 1.5%, though every trailing window shown was a decline of at least 10%.
