Housing starts fall 5.2% in September; single-family permits slip
Builders started homes at a 1,221,000 annual pace, the third monthly drop in a row by the latest count, as single-family permits fell to 845,000 and builder sentiment sank to its lowest since 2012.
By American Policy WireFiled
The bottom line Fewer single-family permits now means fewer new homes for sale next year, and builders say rates above 7% are keeping buyers away even as more of them cut prices.
Single-family housing starts fell 4.6% in September, yet they still ran 2.6% ahead of a year earlier [1]. The permits that come before them did not hold up as well: single-family authorizations dropped 4% to an 845,000 annual rate, 4.8% below September 2025, the Census Bureau and HUD reported Tuesday [1].
Why it matters: Permits are the pipeline for homes buyers will be able to tour next year. They are thinning while mortgage rates sit far above where they were last fall: Freddie Mac’s 30-year average was 7.40% in the week to Oct. 15, against 6.27% a year earlier [4, 5].
By the numbers
- 1,221,000: Total starts at a seasonally adjusted annual rate, down 5.2% from August’s revised 1,288,000 and 7.4% below September 2025 [1].
- 1,400,000: All permits, down 0.2% from August and 3.0% from a year earlier. Permits for buildings with five or more units rose 5.9% to 503,000 [1].
- 1,192,000: Completions, up 2.2% from August but 14.0% below a year earlier. Single-family completions slipped to 840,000 [1].
- 279,000: Units authorized but not yet started, 9.8% more than a year earlier [1].
- 29: NAHB/Wells Fargo builder sentiment for October, down three points and the lowest reading since June 2012 [3].
Why do the July and August numbers keep changing? Monthly construction figures are preliminary and get revised as more survey responses arrive [1]. Our August report used a first estimate of 918,000 single-family starts and 1,275,000 in total. Tuesday’s release lowered single-family to 900,000 and raised the total to 1,288,000 [1]. July moved again too, to 1,369,000 total starts and 875,000 single-family [1]. With those revisions, total starts have fallen every month since June’s 1,439,000 [1].
Apartment building did most of the damage over the year. Starts in buildings with five or more units ran at 349,000, down 7.2% from August and 25.9% from September 2025 [1]. NAHB, which counts every building with two or more units, put multifamily starts at 362,000, down 24.9% from a year earlier [2].
The regional picture split. Total starts fell 19.0% in the Midwest and 23.2% in the West, while the South rose 6.1% and the Northeast was flat [1]. In the South, the biggest building region, single-family starts still fell 3.3% [1].
How does 2026 compare with last year? On an unadjusted basis, builders started 1,036,500 homes from January through September, 1.1% fewer than in the same months of 2025 [1]. Single-family starts were down 4.0% over that stretch; starts in larger apartment buildings were up 6.9% [1]. Units under construction stood at 1,280,000, 3.3% below a year earlier, with 587,000 of them single-family homes [1].
What it means for buyers and owners
- Discounts are at a high. In NAHB’s October survey, 43% of builders cut prices, the largest share NAHB has recorded in the 2020-2026 period, and the average cut held at 6% for a seventh month [3].
- Incentives are routine. 65% of builders offered sales incentives in October, the 19th straight month at or above 60% [3].
- Fewer buyers are showing up. The index of prospective-buyer traffic fell five points to 18, and expected sales over the next six months fell five points to 32 [3]. NAHB Chief Economist Robert Dietz said traffic was at its lowest since April 2012, “excluding the pandemic’s onset in April 2020” [3].
- Borrowing costs are higher across the board. The Fed raised its target range to 3.75% to 4% on Sept. 16, by a 12-0 vote [6]. The 15-year fixed average was 6.71% in the week to Oct. 15 [4].
What’s next: The Census Bureau and HUD publish October construction figures on Nov. 18 [1].
The other side: NAHB’s leaders tie the slowdown to costs as much as demand. Chairman Bill Owens said “mortgage rates have climbed well above 7% in recent weeks,” and he also cited higher costs for construction loans, materials and diesel, plus immigration enforcement that he said is causing construction delays [3]. Owens credited the administration’s push on regulatory reform with easing some cost pressure [3]. NAHB’s Danushka Nanayakkara-Skillington said September’s single-family numbers “align with our forecast of lower production in 2026, with further declines expected in 2027” [2].
The Census Bureau is more cautious about any single month. Its notes say it can take three months to establish a trend in permits and six months for total starts [1]. The 279,000 approved-but-unbuilt units are the open question: whether builders start them, or let permits sit while buyer traffic stays this thin [1, 3].
Q&A Quick answers
- Q1How many housing starts were there in September 2026?
- Builders started homes at a seasonally adjusted annual rate of 1,221,000, down 5.2% from August's revised 1,288,000 and 7.4% below September 2025 [1]. The Census Bureau says neither change is statistically significant [1].
- Q2Did single-family housing starts fall in September 2026?
- Yes, by the first estimate: single-family starts fell 4.6% to an 859,000 annual rate, though that was still 2.6% above September 2025 [1, 2].
- Q3Are single-family building permits down in 2026?
- Yes. Single-family permits fell to an 845,000 annual rate in September, 4.8% below a year earlier, and unadjusted single-family permits for January through September were 2.8% behind 2025 [1].
- Q4How many builders cut prices in October 2026?
- 43% did, the highest share NAHB has recorded since 2020, with an average cut of 6% [3]. Some 65% used sales incentives [3].
- Q5When is the next housing starts report?
- The Census Bureau and HUD have scheduled October construction figures for November 18, 2026 [1].