Housing starts fall 5.2%; single-family permits hit lowest since 2023
Starts ran at a 1.221 million annual pace in September, short of a 1.305 million forecast, as single-family permits fell to their lowest level since March 2023.
Key takeaways
U.S. housing starts fell 5.2% in September to a seasonally adjusted annual rate of 1.221 million, the U.S. Census Bureau and the Department of Housing and Urban Development said Tuesday. Forecasters surveyed by Econoday had expected 1.305 million.
Single-family starts, the bulk of homebuilding, fell 4.6% to an 859,000 pace. Single-family permits fell 4% to 845,000, the lowest since March 2023. Total starts were 7.4% below September 2025.
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.
NAHB Chairman Bill Owens said Tuesday that high mortgage rates, affordability problems and rising construction costs held back homebuilding in September. A day earlier, the National Association of Home Builders said its NAHB/Wells Fargo Housing Market Index fell three points to 29, the lowest since June 2012.
The 30-year fixed mortgage rate averaged 7.40% in the week ended Oct. 15, unchanged from the week before and the highest in nearly three years, according to Freddie Mac’s Primary Mortgage Market Survey.
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%
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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%.
