US housing starts hit four-month low amid declining demand

New home construction in the United States fell to a four-month low in September, according to federal government data. Housing starts dropped by 5.2% on an annual basis to 1.22 million units, a figure that fell below economist expectations.

Single-family home construction saw a 4.6% decline, reaching its lowest level in a year, while new multi-family construction fell by nearly 7%. Building permit applications for single-family homes also reached their lowest levels since early 2023.

The housing market is currently constrained by affordability challenges, which have been exacerbated by high mortgage interest rates. Additionally, builder confidence has dropped to a 14-year low, as developers hesitate to begin new projects until inventory levels improve.