U.S. Housing Starts Fell in September

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WASHINGTON—U.S. housing starts declined in September, as single-family-home and apartment building construction dropped from August.

Housing starts fell 5.3% in September from the prior month to a seasonally adjusted annual rate of 1.201 million, the Commerce Department said Wednesday. Residential building permits, which can signal how much construction is in the pipeline, also fell, declining 0.6% from August to an annual pace of 1.241 million last month.

Economists surveyed by The Wall Street Journal had expected a 4.8% drop for starts and a 3.3% gain for permits in September.

Housing-starts data are volatile from month to month and can be subject to large revisions. September’s 5.3% drop for starts came with a margin of error of 11.3 percentage points.

To be sure, the broader trend shows continued construction growth, as starts grew by 6.4% in the first nine months of 2018 compared with the same period a year earlier.

Starts declined 0.9% in September from the prior month for single-family construction and dropped 12.9% for multifamily construction. Permits last month were down 9.3% for buildings with five or more units and were up 2.9% for single-family homes compared with August.

Continued job and wage growth are helping drive housing demand, but factors such as rising material costs and labor shortages have posed challenges to builders seeking to meet that solid demand. Would-be buyers also are dealing with rising prices and borrowing costs.

Meanwhile, a gauge of U.S. home-builder confidence ticked up in October after pulling back from a multidecade high in recent months.

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