Sept. housing starts drop 4.7%; permits fall 4.5%

WASHINGTON — The pace of housing starts fell by 4.7% to a 1.127 million seasonally adjusted annual rate in September, below expectations for a 1.170 million pace following mixed revisions to the previous two months, data reported by the Commerce Department Wednesday morning showed.

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Housing starts fell 9.3% in the South region, reflecting some hurricane impact from Harvey and Irma, though Commerce did not specifically address the impacts on the September data. Housing starts should turn upward in the coming months as homes in the impacted regions will need to be rebuilt. Commerce said previously that total rebuilds will count toward permits and starts, but that repairs of homes would not.

Housing starts of single-family homes fell by 4.6% in September after a 3.3% rise in the previous month. Starts of multi-family homes fell 5.1% after an 8.7% August decrease, based on an MNI calculation.

The pace of unadjusted starts stand 6.6% above its year ago level, a sign that home building has improved despite the recent noise. The NAHB index for October rose sharply when it was reported on Tuesday after a September dip that was prompted by concerns about supply and labor shortages.

Building permits fell 4.5% in the month, but homes permitted but not started rose 1.4%, so starts could see a rebound of activity in October if conditions are right. Single-family permits were up 2.4% while multi-family permits fell 16.1%.

Given the only modest decline in September starts and the mixed revisions to the previous months, the third quarter average for starts was roughly unchanged from the second quarter average, while permits were up modestly.

Market News International is a real-time global news service for fixed-income and foreign exchange market professionals. See www.marketnews.com.
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