US housing starts fell 5.2% in September to a seasonally adjusted annual rate of 1.22M units, the Census Bureau reported. That's 7.4% below the September 2025 pace.
Single-family starts dropped 4.6% to 859K, the lowest level since September 2025, while multifamily starts fell 6.7% to an annualized 362K pace.
Permits, a signal of future building, slipped 0.2% to 1.4M. Single-family permits fell 4%, offset by a 6.1% rise in multifamily.
Housing Starts Slid in September, Led by Apartments
How many new homes builders started, at a seasonally adjusted annual pace. Multifamily starts are down about a quarter from a year ago, while single-family permits point to more weakness ahead.
| Measure | Annual pace | vs. August | vs. a year ago |
|---|---|---|---|
| All housing starts | 1.22M | -5.2% | -7.4% |
| Single-family starts | 859K | -4.6% | +2.6% |
| Multifamily starts | 362K | -6.7% | -24.9% |
| Single-family permits (future building) | 845K | -4.0% | -4.8% |
The housing market hits another low
Pending home sales, a measure of signed contracts on existing homes, dropped 7.3% from August and 11.3% year over year, according to the National Association of Realtors.
Builder confidence fell three points to 29 in October on the National Association of Home Builders/Wells Fargo Housing Market Index, the lowest since June 2012.
Any reading under 50 means more builders see conditions as poor than good. Buyer traffic sank to 18.
A record 43% of builders cut prices in October, with the average cut holding at 6% for a seventh straight month. Another 65% used sales incentives.
The average rate on the 30-year fixed mortgage started September near 6.8% and hit 7.6% by month-end, per Mortgage News Daily.
Mortgage Rates Broke Above 7% in Late September
Average 30-year fixed mortgage rate, weekly. Rates have climbed nearly a full point since early July, the stretch when September buyers were shopping.
Line chart. Rate (%). Jul 2: 30-year fixed rate 6.43%. Jul 9: 30-year fixed rate 6.49%. Jul 16: 30-year fixed rate 6.55%. Jul 23: 30-year fixed rate 6.58%. Jul 30: 30-year fixed rate 6.66%. Aug 6: 30-year fixed rate 6.69%. Aug 13: 30-year fixed rate 6.67%. Aug 20: 30-year fixed rate 6.65%. Aug 27: 30-year fixed rate 6.66%. Sep 3: 30-year fixed rate 6.71%. Sep 10: 30-year fixed rate 6.76%. Sep 17: 30-year fixed rate 6.95%. Sep 24: 30-year fixed rate 7.03%. Oct 1: 30-year fixed rate 7.28%. Oct 8: 30-year fixed rate 7.40%. Oct 15: 30-year fixed rate 7.40%.
Discounting now means thinner margins later
Goldman Sachs kept its third-quarter GDP tracking estimate at 3.3% despite the housing drop, and expects homebuilder margins returning to pre-pandemic levels to pressure single-family starts over the coming year.
Speculative inventory is the thing to watch this earnings season. Builders classified as conservative on unsold homes under construction include NVR, KB Home, PulteGroup, and Toll Brothers.
Century Communities and Meritage have run high spec levels, with D.R. Horton and Lennar in the middle.
The September rate spike and weak absorption could leave builders holding more unsold homes than planned, pointing to fourth-quarter margin pressure.
Tight supply feeds back into inflation. Housing contributes nearly half of the year-over-year pace of core consumer price index, and home prices have kept rising even with higher mortgage rates.
Nationwide Financial senior economist Ben Ayers expects construction activity to stay moribund into 2027.
