Home Construction Drops as Builders Confront Higher Mortgage Rates

Construction of new single-family homes faced a reversal in September following a brief August rebound, the U.S. Census Bureau reported Tuesday.Single-family housing starts fell last month to a seasonally adjusted annual rate of 859,000, down 4.6% from August's 900,000, which has been revised down from 918,000. While the September pace was up 2.6% year over year, the comparison comes against 2025's multi-year low. Total privately owned housing starts, including multi-family units, in September fell 5.2% month over month and 7.4% year over year to an annualized 1.22 million units. Meanwhile, new building permits edged down 0.2% below the revised August rate, to 1.4 million annualized and were 3% lower than the September 2025 rate. There were 845,000 single-family authorizations, down 4% from August. These results highlight a cooling housing market caused as mortgage rates top 7%, keeping many would-be buyers firmly on the sidelines.Last week, Freddie Mac reported that the average rate on 30-year fixed home loans was at 7.4%, pushed up by high 10-year Treasury yields amid global inflation fears and war-related oil shocks. On Monday, the National Association of Home Builders/Wells Far...