Key facts
- US single-family housing starts rose 7.6% to 918,000 units in August.
- Single-family building permits decreased 1.8% to 878,000 units in August.
- Overall housing starts fell 2.6% to 1.275 million units in August.
- Overall building permits fell 2.7% to 1.394 million units in August.
- The average 30-year fixed-rate mortgage was 6.76% last week, the highest in over a year.
US single-family homebuilding saw an increase in August, with housing starts rising 7.6% to a seasonally adjusted annual rate of 918,000 units, according to data from the Census Bureau. This marks a 5.2% increase on a year-over-year basis.
However, permits for future construction declined, with single-family building permits falling 1.8% to 878,000 units. Overall housing starts also decreased by 2.6% to 1.275 million units, and overall building permits dropped 2.7% to 1.394 million units.
The Federal Reserve raised interest rates by a quarter of a percentage point to a range of 3.75%-4.00% on Wednesday, signaling further increases ahead. This action, coupled with rising oil prices due to the Middle East conflict and uncertainty over inflation and national debt, has driven mortgage rates higher. The average rate for a 30-year fixed mortgage reached 6.76% last week, its highest level in over a year, according to Freddie Mac.
Sentiment among single-family homebuilders has fallen to a one-year low, according to a National Association of Home Builders survey. Builders cited rising mortgage rates, labor shortages exacerbated by immigration policies, and increased material costs due to tariffs as reasons for the decline.