U.S. housing starts fell 5.3% last month

WASHINGTON — U.S. home construction fell 5.3 percent in September, a sign that recent hurricanes and rising mortgage rates may be weighing on the market.

The Commerce Department said Wednesday that housing starts slipped last month to a seasonally adjusted annual rate of 1.2 million, down from 1.27 million in August. So far this year, starts have increased 6.4 percent. But the pace of homebuilding has downshifted since May.

September groundbreakings were also likely hurt by Hurricane Florence striking North and South Carolina — and groundbreakings could possibly be depressed in October after Hurricane Michael hit the Florida Panhandle.

Homebuyers are facing new cost pressures that could be dampening demand.

Mortgage buyer Freddie Mac says that the average 30-year fixed-rate mortgage jumped to 4.9 percent last week, the highest level since 2011. The combination of higher borrowing costs and rising home values has made home ownership less affordable.

“It may be tempting to draw national conclusions from these storm-related dips and rallies, but the regional blips can’t obscure the yearlong malaise in the national single-family home construction market: Starts have been hit or miss, sales flat and permits trending downward for months,” said Aaron Terrazas, a senior economist at the real estate firm Zillow.