US housing starts sank 5.3 percent in September

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)
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)

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

Text of the apology from US swimmer Ryan Lochte

Aug 19, 2016

Text of the apology US swimmer Ryan Lochte posted to his Instagram account

Pfizer spends $14B on Medivation in cancer fight

Aug 22, 2016

Pfizer will pay about $14 billion to buy cancer drug developer Medivation as it fortifies its hold...

Italy, German, French eye beefed up EU defense after attacks

Aug 22, 2016

The leaders of Italy, France and Germany vowed Monday to improve European-wide security efforts in...

Speedo USA, 3 other sponsors drop Lochte after Rio incident

Aug 22, 2016

Ryan Lochte loses four major sponsors over a drunken incident during the Rio Olympics that he...

Scams & waste loom as charity millions donated after Orlando

Aug 28, 2016

The more than 430 fundraisers posted on the GoFundMe website after the mass shooting at an Orlando...

Weather, 20 December
Houston Weather
+7

High: +11° Low: -2°

Humidity: 83%

Wind: NNE - 7 KPH

Canberra Weather
+27

High: +27° Low: +17°

Humidity: 87%

Wind: W - 20 KPH

Roissy-en-France Weather
+6

High: +6° Low: -5°

Humidity: 87%

Wind: ENE - 7 KPH

Florence Weather
+9

High: +9° Low: +6°

Humidity: 97%

Wind: ENE - 17 KPH

Parga Weather
+7

High: +16° Low: +4°

Humidity: 100%

Wind: SE - 25 KPH