US housing starts rebound by less than expected in September as rates drag

Homebuilding activity in the U.S. rebounded last month, but by less than expected held as higher interest rates dragged on activity.

According to the Department of Commerce, in seasonally adjusted terms housing starts jumped at a month-on-month pace of 7.0% in September to reach an annual rate of 1.358m (consensus: 1.393m).

Single-family housing starts were 3.2% higher to 963,000, alongside a 17.1% jump in multi-family starts.

Building permits meanwhile fell by 4.4% on the month to 1.473m (consensus: 1.45m).

Commenting on the latest numbers, Kieran Clancy, senior U.S. economist at Pantheon Macroeconomics, pointed out how September's increase only reversed about half of August's plunge and 14% beneath the May peak.

"Single-family starts and new home sales rose at the start of this year, as a lack of existing homes enabled homebuilders’ to capture market share, but the trend is now flattening in the wake of the recent surge in rates," Clancy said.