WASHINGTON — U.S. home building fell last month after reaching a 12-year high in August, driven by a sharp decline in the construction of new apartments. Yet single-family home construction ticked higher for a fourth month.
The Commerce Department said Thursday that overall housing starts dropped 9.4% to a seasonally adjusted annual rate of 1.26 million. The construction of new apartments plunged 28.3% to an annual pace of 327,000.
The report suggests the housing market is in solid shape, despite last month’s drop. The construction of both homes and apartments has risen 1.6% in the past year. And single-family home building ticked up 0.3% in September to an annual rate of 918,000. Single-family construction typically creates more jobs than apartment units. Permits for single-family home building also rose slightly, a good sign for future building.
Lower mortgage rates and a healthy job market that is modestly increasing wages are lifting home sales and the demand for new homes. Sales of existing homes rose to a 17-month high that month and sales of new homes jumped. The average interest rate on a 30-year mortgage ticked up last week but is still at a historically low level of 3.69%.