Privately-owned housing units authorized by building permits in September were at a seasonally adjusted annual rate of 1,400,000. This is 0.2 percent below the revised August rate of 1,403,000 and is 3.0 percent below the September 2025 rate of 1,444,000. Single-family authorizations in September were at a rate of 845,000; this is 4.0 percent 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. …Privately-owned housing starts in September were at a seasonally adjusted annual rate of 1,221,000. This is 5.2 percent (±11.8 percent)* below the revised August estimate of 1,288,000 and is 7.4 percent (±11.5 percent)* below the September 2025 rate of 1,319,000. Single-family housing starts in September were at a rate of 859,000; this is 4.6 percent (±10.0 percent)* below the revised August figure of 900,000. The September rate for units in buildings with five units or more was 349,000.

The Federal Reserve’s inflation fight is running into a growing complication: The housing market is slumping even as broader price pressures persist. Housing data deteriorated further in September, according to separate reports Tuesday, adding to an already complicated policy landscape for the central bank as it contemplates its next move on interest rates. Things appear poised to get worse before they get better. If the Fed raises short-term rates as expected over the next several months, mortgage rates that are already at 7.43% could push even higher, putting a further damper on affordability. Higher home borrowing costs have coincided with a general rise in inflation and a housing shortage. “The housing market is about to go into a deep sleep unless Washington can do a 180 on its policies and make the cost of a new home more affordable,” wrote Chris Rupkey, chief economist at Fwdbonds. 

Single-family housing starts declined in September as builders faced higher financing, building material costs, and ongoing labor shortages. Overall housing starts decreased 5.2% in September to a seasonally adjusted annual rate of 1.22 million units. This pace reflects the number of housing units builders would begin over the next 12 months if September’s activity were sustained. Within the total, single-family starts decreased 4.6% to an 859,000 seasonally adjusted annual rate, the lowest level in a year. However, single-family starts were up 2.6% compared to September 2025. On a year-to-date basis, single-family starts are down 4.0%, reflecting continued challenges facing home builders. Given recent volatility, the three-month moving average provides a clearer signal, falling to 878,000 units. Multifamily starts, which include apartment buildings and condominiums, decreased 6.7% from August to September to an annualized 362,000 pace. The three-month moving average for multifamily construction has trended lower to 415,000 units, and activity is 24.9% lower compared to year-earlier levels.

Click to Enlarge

The yield on long-term 10Y US Treasury bonds remains close to multi-decade highs even after some relief in recent days. The 10Y yield eased to around 5.1% yesterday, but remains roughly 50 bps higher than before Chair Warsh’s Jackson Hole speech as markets have priced a more hawkish Fed path. The move has already tightened financial conditions, lifting mortgage and corporate borrowing costs and raising the hurdle rate for investment. As today’s chart shows, the 100 bps rise in 10Y yields this year has been driven mainly by expectations of Fed tightening and a wider term premium, rather than by a major shift in growth or inflation fundamentals.  …Why this matters: Higher yields will continue to pressure interest-rate-sensitive areas such as housing and credit-dependent spending, but they do not necessarily imply a broad downturn. Much of the private sector remains insulated by fixed-rate borrowing, relatively low debt-service burdens and strong corporate balance sheets.