Housing starts declined 5.3% in September to a seasonally adjusted annual rate of 1.201 million units (Briefing.com consensus 1221K), with single-family starts down 0.9% to 871,000.
Building permits were down 0.6% to a seasonally adjusted annual rate of 1.241 million (Briefing.com consensus 1273K), although that was owed to a 9.3% decline in permits for buildings with five units or more. Single-family permits were up 2.9% to 851,000, which tied with March for the third-lowest annual rate this year.
Total starts were up 29.0% in the Northeast (single-unit down 6.7%); down 14.0% in the Midwest (single-unit up 10.2%); down 13.7% in the South (single-unit down 6.8%); and up 6.6% in the West (single-unit up 7.0%).
Total permits were down 9.8% in the Northeast (single-unit up 13.7%); down 18.9% in the Midwest (single-unit down 1.7%); up 0.6% in the South (single-unit up 1.6%); and up 11.1% in the West (single-unit up 5.8%).
The number of units under construction at the end of the period stood at a seasonally adjusted annual rate of 1.129 million. That left the third quarter average at 1.124 mln, up less than 0.1% from the second quarter average, so it won't account for much in terms of a positive input into Q3 GDP growth forecasts.The key takeaway from the September Housing Starts and Building Permits report is that the supply of new homes isn't picking up fast enough to meet the demand for new homes at more affordable price points. Accordingly, overall home sales activity will continue to be curtailed by affordability constraints.