U.S. Single-Family Homebuilding Hits 5-Month High, Driven by Market Volatility

Single-family homebuilding in the U.S. increased in September but future permits saw limited growth due to high inventory and cautious buyers. Despite rising for two consecutive months, investment in the residential sector continues to hinder economic growth. Potential buyers await lower mortgage rates amid recent hikes.

U.S. single-family homebuilding surged in September, reaching a five-month high, though growth in permits for future construction was minimal. High inventories and cautious prospective buyers, waiting for lower mortgage rates, played into this mixed picture of growth.

The sector, although experiencing progress with a second consecutive monthly increase, still weighs on economic growth for the third quarter. Key indicators such as retail sales and national account adjustments prompted rising mortgage rates, exacerbating the industry's challenges.

Regional disparities also emerged, with notable growth in the South and Northeast but declines in the Midwest and the West. Economists speculate that while residential investment may turn positive in the next quarter, current elevated inventories challenge significant new development.

(With inputs from agencies.)