Housing starts unexpectedly plunge
New residential construction unexpectedly fell in September.
Housing starts fell by 9% at a seasonally adjusted annual rate of 1.05 million, according to the Census Bureau.
Starts of multi-family structures with five or more units fell 39%, and were the biggest drag on overall construction.
Regionally, the biggest drop was recorded in the Northeast, where new construction fell 36% from August, and 32% year-on-year. Housing starts in the South — typically the strongest region for construction in the US — fell 5.3% from August.
Economists had forecast that starts rose by 2.9% at a rate of 1.18 million, according to Bloomberg.
(Jefferies)
Building permits rose 6.3% at a rate of 1.23 million. The forecast was for building permits to increase 1.1% at a rate of 1.17 million.
The data showed that new construction of single-family dwellings was solid, implying that demand remained strong in this segment even though overall starts slumped.
The level of single-family permits had been running ahead of starts. And because permits are needed to begin construction, that strength suggested that single-family starts would rebound. They did in September, by 8.1%.
Monthly housing-market data are usually quite volatile and subject to revisions.
On Tuesday, the National Association of Homebuilders' monthly sentiment index showed that builder confidence remained near the highest level in a decade.
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