September Housing Starts Miss Forecasts at 1.221 Million

The reading falls well short of the 1.305 million rate economists had expected, breaking from August's firmer housing numbers.

The Census Bureau put September housing starts at a seasonally adjusted annual rate of 1.221 million units, short of the 1.305 million rate economists had expected. The report landed ahead of the Federal Reserve's October 27-28 meeting, according to TokenPost.

August starts had run at a seasonally adjusted annual rate of 1.275 million units, down 2.6% from July and 1.2% from a year earlier, Reuters reported. Within that August total, single-family starts rose 7.6% to 918,000 units while multifamily starts fell, according to the National Association of Home Builders. Building permits, a forward-looking measure of future construction, had also slipped in August, down 2.7% to a 1.394 million-unit annualized rate.

The September shortfall breaks from the steadier tone set by August's new home sales beat, and points to builders pulling back even as buyer demand had shown signs of holding up. That gap between resilient demand and weaker construction complicates the mixed picture built over recent durable goods and trade data, since fewer starts now can tighten housing supply and feed back into the pricing pressures that easing mortgage rates were supposed to relieve.

A single monthly miss does not confirm a trend. But combined with flat durable goods orders, it adds another data point suggesting momentum in rate-sensitive parts of the economy is softer than the home sales figure had implied.