Builders pull back: housing starts drop and builder confidence hits a 2012 low
Homebuilders are tapping the brakes. U.S. housing starts fell 5.2% in September to an annual pace of 1,221,000, according to the Census Bureau and HUD, well below what economists expected.
Fewer new homes in the pipeline
- Single-family starts fell to 859,000
- Single-family building permits fell to 845,000, the fewest since March 2023
- Housing starts were down 7.4% from a year earlier
Builder confidence is the weakest it has been in years. The NAHB/Wells Fargo Housing Market Index fell to 29 in October, its lowest level since June 2012.
New-home sales hold steady, with discounts
Sales of new single-family homes came in at an annual pace of 676,000 in September, with a median price of $400,400. Builders have leaned on price cuts and incentives to keep sales moving, and the number of finished new homes for sale has dropped from 128,000 in January to 111,000. Even so, there is an 8.4-month supply of new homes, above what is considered a balanced market.
What to watch
The October construction report is due November 18, and October new-home sales follow on November 25. Fewer homes being built today can mean tighter supply and firmer prices a year or two from now, which matters for anyone planning to build or buy.
Sources: U.S. Census Bureau, New Residential Construction, U.S. Census Bureau, New Residential Sales, HousingWire, FinzData.
