Builders started construction on fewer than expected new U.S. homes in September as interest rates on home loans claimed to their highest level in two decades.
Privately owned housing starts in September fell to a seasonally adjusted annual rate of 1.439 million, below the 1.475 million expected, the Commerce Department said Wednesday. This was an 8.1 percent decline from the downwardly adjusted figure for August.
In August, builders unexpectedly accelerated groundbreaking on new residential construction projects, pushing starts up 13.7 percent from the prior month. The figure was revised down on Wednesday from 1.575 million to 1,566 million.
On a year-on-year basis, housing starts are down 7.7 percent in September.
Single-family housing starts in September were at a rate of 892,000, 4.7 percent below the revised August figure of 936,000. Compared with a year ago, single-family starts are down 18.8 percent.
Building permits for new homes rose 1.4 percent to 1.56 million in September, slightly higher than expected. But this growth was exclusive to apartments and multi-family condo projects. Permits for single-family houses fell 3.1 percent and are down 17.3 percent from a year ago.
The average 30-year fixed mortgage rate hit 6.94 percent last week, the highest level since 2002, according to data from the Mortgage Bankers Association. Purchase loan applications have fallen by thirty-eight percent.
On Tuesday, the National Association of Home Builders said its barometer of builder confidence fall for the 10th straight month to the worst level since 2012.