WASHINGTON – The pace of housing starts fell 9.0% to a 1.047 million seasonally adjusted annual rate in September, well below expectations for a 1.175 million pace, with a 38.0% plunge in multi-family starts the key factor, data reported by the Commerce Department Wednesday morning showed.

In contrast, single-family starts jumped 8.1% in the month after a 5.9% dip in the previous month. There were small upward revisions to the pace of starts in the previous two months.

The pace of unadjusted starts stands 15.1% below its year ago level, but single-family starts were up 4.6% over that period. A decline in the NAHB index released on Tuesday could be a negative sign for overall starts activity in the coming months.

There were starts declines in the Northeast, Midwest, and South, while starts in the West region were unchanged.

Building permits rose 6.3% to a 1.225 million rate in September, a stronger rate than the 1.160 million pace expected. This could lead to a rise in the starts in the coming months.

Total housing starts slowed in the third quarter to an average annual rate of 1.138 million from the 1.159 million in the previous quarter, but single-family starts improved to 759,000 from 755,000 in the previous quarter.

Permits were lifted to a 1.174 million average from the 1.140 million average in the second quarter, with single-family permits down slightly and multi-family permits up.

Completions fell 8.4% in September. Homes permitted but not started were up 6.2% in September at the same time that permits rose and starts declined, suggesting builders were reluctant to break ground. Homes under construction posted a 0.1% decrease to 1.038 million units, but was still near a multi-year high.

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