U.S. Housing Starts Plunge To Lowest Level In Well Over A Year

(RTTNews) - Suggesting weakness in the housing market, the Commerce Department released a report on Wednesday showing that new residential construction in the U.S. unexpectedly tumbled to its lowest level in well over a year in September.

The report said housing starts plunged by 9.0 percent to an annual rate of 1.047 million in September after slumping by 5.6 percent to a revised 1.150 million in August.

The continued decline came as a surprise to economists, who had expected housing starts to climb to a rate of 1.180 million from the 1.142 million originally reported for the previous month.

With the unexpected decrease, housing starts dropped to their lowest annual rate since hitting 964,000 in March of 2015.

The steep drop in housing starts was due to a substantial decrease in multi-family starts, which plunged by 38.0 percent to a rate of 264,000 in September from 426,000 in August.

On the other hand, the report said single-family starts jumped by 8.1 percent to a rate of 783,000 in September from 724,000 in the previous month.

The report also said housing starts in the Northeast plummeted by 36.0 percent, while starts in the Midwest tumbled by 14.1 percent and starts in the South slid by 5.3 percent. Housing starts in the West were flat.

Meanwhile, the Commerce Department also said building permits surged up by 6.3 percent to an annual rate of 1.225 million in September after rising by 0.7 percent to a revised 1.152 million in August.

Building permits, an indicator of future housing demand, had been expected to increase to 1.165 million from the 1.139 million that had been reported for the previous month.

The bigger than expected increase lifted building permits to their highest annual rate since reaching 1.286 million last November.

Multi-family permits shot up by 16.8 percent to a rate of 486,000 in September from 416,000 in August, while single-family starts edged up by 0.4 percent to a rate of 739,000 from 736,000.

On Tuesday, the National Association of Home Builders released a report showing that homebuilder confidence has pulled back in the month of October after jumping sharply in September.

The report said the NAHB/Wells Fargo Housing Market Index dipped to 63 in October after soaring to an eleven-month high of 65 in September. The drop by the index matched economist estimates.