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Housing Starts Rebound in September, US Real Estate Market Still Faces Challenges
Oct 19, 2023
Housing Starts Rebound in September, US Real Estate Market Still Faces Challenges Dallas
By   Internet
  • City News
  • Housing Starts
  • US Real Estate
  • Housing Market Challenges
Abstract: According to data released by the US Department of Commerce, housing starts rebounded in September, reaching 1.36 million units, slightly higher than expected. However, building permits declined, indicating a lack of confidence among builders.

According to data released by the Commerce Department on Wednesday, housing starts in the United States rebounded in September, marking a positive sign after a significant drop the previous month.


The data showed that new residential construction rebounded by 7% after a 1.5% decline last month, reaching 1.36 million units. This figure was slightly higher than the initial expectations of Wall Street economists, who had projected a 6.8% increase to 1.37 million units. It's worth noting that all the data has been seasonally adjusted.


Meanwhile, building permits, which are an indicator of future construction, decreased by 4.4% to 1.47 million. This number was below the initial expectations of economists, who had anticipated a 6% decline to 1.45 million permits.

Housing Starts Rebound in September, US Real Estate Market Still Faces Challenges

Further scrutiny of key details revealed that the construction pace for single-family homes rose by 3.2% in September, while the pace for apartment buildings increased by 17.1%. Considering regional disparities, housing starts rose in the Midwest, South, and West, with only the Northeast showing a decline.


Additionally, permits for single-family homes increased by 1.8% in September, while permits for buildings with five or more units decreased by 14%.


Currently, around 1.68 million housing units are under construction.


Economists noted that builders appeared to have lost confidence after mortgage rates rose over 7%. They anticipate a downward trend in housing starts in the final months of the year.


Nancy Vanden Houten, an economist at Oxford Economics, highlighted that the multifamily sector, with more abundant supply, will experience more weakness as builders in that area face tighter lending standards.


The market reacted to this data with a lower opening on Wednesday. Additionally, the 10-year Treasury yield rose to 4.87% in early trading.

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Housing Starts Rebound in September, US Real Estate Market Still Faces Challenges
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