September 2024 Housing Starts: Housing Starts As Expected in September, Supported By Single-Family Construction

• Building permits issued in September fell to 1,428,000 (SAAR). That’s 2.9% below the revised August rate and 5.7% lower than a year ago.
• Housing starts fell to 1,354,000 (SAAR) in September, down 0.5% from the revised August estimate and 0.7% lower than a year ago, according to the U.S. Census Bureau. 
• Single-family housing starts increased to 1,027,000 (SAAR) in September, up 2.7% from the upwardly revised August estimate and 5.5% above last September.

What happened: In September, there was another notable increase in construction of single-family homes compared to last month. Single-family housing starts increased again, registering a 5.5% increase over the previous year. Despite the decline in starts for buildings with 5 or more units, more of these units are under construction or just completed than anytime since 1973.

Why this matters: The combination of lower mortgage rates and stronger inflation-adjusted wage growth supported housing demand last month. Zillow data showed that as mortgage rates dipped, more buyers and sellers returned to the housing market and activity surpassed expectations for this time of the year. 

Historically, increases in housing demand led to higher permitting activity. Through August, markets with the most single-family permitting activity relative to last year were Indianapolis, Phoenix, San Diego, San Antonio, and Milwaukee.