US Housing Starts Decline as Mortgage Rates Weigh on Demand

By Augusta Saraiva and Reade Pickert
BNN Bloomberg – Investing
October 19, 2022
Category: Finance & Economics
Region: United States

New US home construction declined in September and permit applications for single-family dwellings fell, adding to evidence that the highest mortgage rates in two decades are sapping demand and discouraging new builds. Residential starts decreased 8.1% last month to a 1.44 million annualized rate, according to government data released Wednesday. Single-family homebuilding dropped to an annualized 892,000 rate, the slowest since May 2020. Construction of multifamily dwellings also declined. Applications to build, a proxy for future construction, rose to an annualized 1.56 million units, led by multifamily properties. Permits for construction of one-family homes fell 3.1% to a more than two-year low of 872,000 in September. The housing market is bearing the brunt of the Federal Reserve’s interest-rate hikes as they aim to free the economy of stubborn inflation. 

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