September housing starts miss badly at 1.221M vs 1.3M expected; pending home sales plunge 7.3% to weakest in 25-year history
What happened
The Census Bureau reported September housing starts fell 5.2% to a 1.221 million seasonally adjusted annual rate, far below the 1.3 million economists expected (the consensus had called for a 2% monthly rise). Single-family starts, the bulk of homebuilding, dropped 4.6% to 859,000, and single-family permits fell 4.0% to 845,000. Separately, the National Association of Realtors reported pending home sales tumbled 7.3% in September versus expectations of a 0.5% dip — the weakest reading in the gauge's 25-year history, down 11.3% year over year. NAR's Lawrence Yun blamed fast-rising mortgage rates: the 30-year fixed averaged 7.40% last week, the highest in nearly three years. Builders are pulling back as demand evaporates, with a glut of unsold homes further reducing incentives to break ground.
Why it matters & what’s next are part of Pro, along with the audio summary.
Start your free 14-day trialWho’s affected
- Homebuilders (D.R. Horton, Lennar, PulteGroup, Toll Brothers) — weaker starts confirm demand destruction; building-materials and suppliers (Lowe's, Home Depot on the margin); banks and mortgage originators exposed to origination volume; the broader rate-sensitive cohort, since collapsing housing data argues both that rates are biting and that the Fed may hesitate to hike further.