September Housing Starts: Headwinds Still Blowing

• September housing starts fell 9.4% from August to a seasonally adjusted annual rate of 1.26 million. That's 1.6% above September of last year, according to the U.S. Census Bureau and the U.S. Department of Housing and Urban Development. Single-family starts rose 0.3% in September from August and 4.3% from September 2018
• Building permits in September fell 2.7% from the revised August figure to 1.39 million (SAAR) units, which is 7.7% above September 2018. 
• Housing completions in September fell 9.7% from August to 1.14 million (SAAR) units, which is 1% below a year ago.

On the heels of an exceptionally and unexpectedly strong August, these steep September retreats in housing starts and permits are a reminder that builders still face considerable headwinds. The constraints of scarce land, expensive labor and economic uncertainty have prevented the market from clocking steadier growth even with assists from low mortgage rates and steady builder confidence.

Still, there are encouraging signs, particularly when you consider that autumn is typically when home building begins to slow. Yes, September's starts and permits were down from August's figures — both of which were revised upward — but they were up significantly from a year ago. Builder sentiment also climbed in October, thanks largely to the anticipation of higher home sales in the near future.

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