September Sees a Decline in US Housing Starts and Building Permits

Unexpected Decline in Housing Starts and Building Permits

In September, Housing Starts and Building Permits saw a disappointing decline, contrary to the surprise increase in August. The decline was more than expected, with Housing Starts and Building Permits falling by -0.5% MoM and -2.9% MoM respectively.

Multi-family Permits and Starts Drop

A detailed look at the data reveals that multi-family permits saw a significant drop of 10.8% MoM, and multi-family starts declined for the second consecutive month. On the other hand, single-family starts rose by 2.7% MoM, and permits saw a slight increase of 0.3% MoM.

Impact of Rate-cut Expectations

It seems that the anticipation of rate cuts has dampened the enthusiasm in the building market.

Housing Completions Also Fall

In addition to the decline in Housing Starts and Building Permits, Housing Completions also saw a drop. However, the Bureau of Labor Statistics (BLS) suggests that construction jobs continue to rise without interruption. Despite the Federal Reserve's decision to cut short-term rates, mortgage rates have increased, and builders have slowed their building plans. This is not the expected outcome of a rate cut.

Bottom Line

The unexpected decline in Housing Starts and Building Permits in September, along with the drop in Housing Completions, paints a complex picture of the US housing market. The impact of rate-cut expectations and the rise in mortgage rates despite a cut in short-term rates by The Fed raises several questions. Is this a temporary setback or a sign of a larger trend? What could this mean for the future of the housing market? Share your thoughts and this article with your friends. Don't forget to sign up for the Daily Briefing, which is delivered every day at 6pm.