Housing Starts Fall Unexpectedly in September; Building Permits Were Flat

U.S. builders scaled back their new housing starts as mortgage rates continue to climb, according to new data released Tuesday by the U.S. Census Bureau.

Building permits, meanwhile, were relatively flat compared with August, indicating that construction could pick up in months ahead, Seeking Alpha reported.

According to the Census Bureau, U.S. housing starts dropped 5.9% month over month to a seasonally adjusted annual rate of 1.221 million in September, missing the 1.305 million consensus, from 1.288 million previously (revised from 1.275 million), according to the Census Bureau data. September marks the lowest level in housing starts since the pandemic in 2020, except for May’s poor reading, noted Heather Long, Chief Economist at Navy Federal Credit Union.

Single-family housing starts came in at an 859,000 rate, or 4.8% below the revised August figure of 900,000.

Hitting the Pause Button

“It’s no surprise that homebuilders are hitting the pause button,” NFCU’s Long said. “Borrowing costs are at some of the highest levels in a quarter century. Meanwhile, home sellers outnumber home buyers by a record amount.”

Seeking Alpha noted that will increase pressure on the rental market.

“Few Americans are buying homes, but they need somewhere to live, so they are turning to rentals,” Long said. “Pressure will build there heading into 2027.”

Meanwhile, building permits edged down 0.2% month over month to a Seasonally Adjusted Annualized Rate (SAAR) of 1.4 million in September, exceeding the 1.387 million consensus, from 1.403M prior (revised from 1.394M), Seeking Alpha noted.

Single-family authorizations were at an 845,000 rate, 4% below the revised August figure of 880,000.

Privately owned housing completions came in at an SAAR of 1.192 million, 2.2% above the revised August estimate of 1.166M but 14% lower than the September 2025 rate. The Census Bureau noted that single-family housing completion SAAR was 840,000, down 2.4% M/M.

Building Permits

Privately-owned housing units authorized by building permits in September were at a seasonally adjusted annual rate of 1.4 million, Seeking Alpha reported. That is 0.2% below the revised August rate of 1.403 million and is 3% percent below the September 2025 rate of 1.444 million.

Single-family authorizations in September were at a rate of 845,000, 4% below the revised August figure of 880,000. Authorizations of units in buildings with five units or more were at a rate of 503,000 in September.

Housing Starts

According to the Census Bureau, privately owned housing starts in September were at a seasonally adjusted annual rate of 1.221 million, 5.2% below the revised August estimate of 1.288 million and 7.4% below the September 2025 rate of 1.319 million. Single-family housing starts in September were at a rate of 859,000, which is 4.6% below the revised August figure of 900,000.

The bureau said the September rate for units in buildings with five units or more was 349,000.

Housing Completions

Privately-owned housing completions in September were at a seasonally adjusted annual rate of 1.192 million, which is 2.2% above the revised August estimate of 1.166 million, but is 14% below the September 2025 rate of 1.386 million. The bureau noted that single-family housing completions in September were at a rate of 840,000. That’s 2.4% below the revised August rate of 861,000.

The September rate for units in buildings with five units or more was 339,000.