US Housing Starts Fall 5.2 Percent in September, Missing Forecasts

US housing starts fell 5.2 percent in September to a seasonally adjusted annual rate of 1.221 million, the Census Bureau said on Tuesday, a weaker reading than Wall Street expected as high borrowing costs kept pressure on home builders.

Economists polled by The Wall Street Journal had expected starts to come in at about 1.3 million and to rise over the month. Instead, September marked a third straight monthly decline and the lowest pace since May, when starts ran at 1.182 million. Starts were also 7.4 percent below the September 2025 rate of 1.319 million.

The August figure was revised up to 1.288 million, which softens the longer trend a little, but the direction in September was down in almost every part of the report. Single-family starts, the biggest piece of the market, fell 4.6 percent to 859,000, their lowest level in a year. Starts in buildings with five or more units fell 7.2 percent to 349,000.

Permits hold steadier

Building permits, which point to construction in the months ahead, barely moved. Permits edged down 0.2 percent to an annual rate of 1.4 million, slightly above the 1.39 million economists expected. Single-family permits fell 4.0 percent to 845,000, while permits for buildings with five or more units rose 5.9 percent to 503,000. Builders are still lining up projects, even as they slow the pace at which they break ground.

The West and Midwest pull back

The regional picture was uneven. Starts fell 23.2 percent in the West to 235,000 and 19.0 percent in the Midwest to 158,000. The Northeast held steady at 114,000, and the South, the largest building region, rose 6.1 percent to 714,000.

Rates sit behind the slowdown

The report landed one day after the National Association of Home Builders said its confidence index fell to 29 in October, the lowest reading since 2012, with builders pointing to mortgage rates, building costs and a shortage of workers. The average 30-year fixed mortgage rate reached 7.40 percent last week, according to Freddie Mac figures, near its highest level in three years. At that rate, many first-time buyers are priced out, and builders say traffic through model homes has thinned.

The Census Bureau notes that its monthly housing estimates carry wide margins of error and are often revised, so one month does not settle the trend. What September does show, alongside the builder survey, is a market that is cooling on both sides: buyers are holding back at current rates, and builders are starting fewer homes in response.