US housing starts declined 8.1% month-over-month in September to a seasonally adjusted annual rate of 1.439 million units (consensus 1.465 million). Affordability is the major issue, the weekly MBA Mortgage Application Index declined 4.5%, as mortgage demand hit its lowest level since 1997. Building permits rose 1.4% month-over-month to 1.564 million (consensus 1.550 million). We see continuing weakness in starts and permits for single-family units, which were down 4.7% and 3.1% month-over-month, respectively.
The move suggests disruption and demographic influences.
United States Housing Starts September 2022
The keynote from the report was the 28% increase in multi-unit starts. Single-family starts were up 3.4%. Starts rose month-over-month in three of the four geographic regions.
- US Total housing starts declined 8.1% month-over-month in September to a seasonally adjusted annual rate of 1.439 million units (consensus 1.465 million). Below the revised August 2022 estimate of 1,566,000.
- Single-family units down 4.7% month-over-month.
- Multi-unit starts were down 13.2% month-over-month.
- Change in single-unit starts by region: Northeast (-6.5%); Midwest (-13.8%); South (+2.5%); and West (-15.8%).
- Number of units under construction at the end of the period increased 0.5% month-over-month to a seasonally adjusted annual rate of 1.710 million.
The housing market had been supported by low interest rates and increasing demand from people moving away from big cities due to the coronavirus crisis, but the momentum slowed with rising inputs amid supply constraints could limit production to ease a shortage of homes. Homebuilding activity has seen an adverse impact from sharply higher mortgage rates on buyer demand and builder sentiment. Further to rising mortgage rates, headwinds come from supply constraints and higher house prices. Rates are now sharply higher (over 7%).
United States Building Permits September 2022
- US Building Permits rose 1.4% month-over-month to 1.564 million
- Permits for single-family units were down and 3.1% month-over-month
- Change in single unit permits by region: Northeast (+3.6%); Midwest (-1.8%); South (-2.0%); and West (-8.8%).
- Multi-unit permits were up 7.8% month-over-month.
Housing Completions
- Privately‐owned housing completions in September were at a seasonally adjusted annual rate of 1,427,000. This is 6.1 percent (±11.0 percent) above the revised August estimate of 1,345,000 and is 15.7 percent (±13.1 percent) above the September 2021 rate of 1,233,000.
- Single‐family housing completions in September were at a rate of 1,049,000; this is 3.2 percent (±8.8 percent)* above the revised August rate of 1,016,000.
- The September rate for units in buildings with five units or more was 376,000
Notice of methodology change: Beginning with the January 2022 New Residential Construction release on February 17, 2022, the monthly Building Permits Survey design will change from a representative sample to a cut‐off sample. This change will allow complete local and county data on new housing units authorized by permits to be published on a monthly basis going forward. For additional details on this change and the impact on New Residential Construction, see our FAQ document.
Source: US Census
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