Single-Family Starts Down as Affordability Challenges Persist

Single-family housing starts declined in September as builders faced higher financing and building material costs and ongoing labor shortages.

Overall housing starts decreased 5.2% in September to a seasonally adjusted annual rate of 1.22 million units, according to a report from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau.

The September reading of 1.22 million starts is the number of housing units builders would begin if development kept this pace for the next 12 months. Within this overall number, single-family starts decreased 4.6% to an 859,000 seasonally adjusted annual rate and are up 2.6% compared to September 2025. The multifamily sector, which includes apartment buildings and condos, decreased 6.7% to an annualized 362,000 pace and are down 24.9% compared to September 2025.

“Housing starts declined in September as high mortgage rates, persistent affordability challenges and rising construction costs held back home building,” said Bill Owens, chairman of the National Association of Home Builders (NAHB) and a home builder and remodeler from Worthington, Ohio. “High land, labor and construction costs are eroding builder confidence. A sustained increase in home building is key to long-term affordability, but near-term construction depends on mortgage rates, financing conditions and efforts to ease regulatory barriers.”

“Declining housing starts reflect the high borrowing costs and affordability challenges builders face, consistent with our recent builder surveys,” said Danushka Nanayakkara-Skillington, NAHB’s assistant vice president for forecasting and analysis. “September’s single-family starts data align with our forecast of lower production in 2026, with further declines expected in 2027 as rates stay elevated and material costs rise.”

On a regional and year-to-date basis, combined single-family and multifamily starts were 8.3% higher in the Northeast, 2% lower in the Midwest, 0.3% lower in the South and 6.3% lower in the West.

Overall permits decreased 0.2% to a 1.40-million-unit annualized rate in September. Single-family permits decreased 4% to an 845,000-unit rate and are down 4.8% compared to September 2025. Multifamily permits increased 6.1% to an annualized 555,000 pace and are down 0.2% compared to September 2025.

Looking at regional permit data on a year-to-date basis, permits were 10.6% higher in the Northeast, 2.2% higher in the Midwest and 3.2% lower in the South. The West saw no change.