US single-family housing starts rebound in August; building permits fall

Starts for housing projects with five units or more, a very volatile segment, plunged 22.5% to a rate of 344,000 units in August. Multi-family housing starts decreased 15.5% on a year-over-year basis. Overall housing starts fell 2.6% to a pace of 1.275 million units. They decreased 1.2% on a year-over-year basis in August.

Building permits for multi-family housing projects dropped 3.1% to a rate of 467,000 units last month. Overall building permits fell 2.7% to a rate of 1.394 million units. They increased 3.5% on a year-over-year basis in August.

Mortgage rates have surged, tracking longer-term US Treasury yields as the US-Israeli war with Iran drove oil prices above $100 a barrel. Bond yields have also risen amid uncertainty over the Federal Reserve's response to inflation and a ballooning national debt. The yield on the benchmark 10-year Treasury note is hovering around 5.0%.

The US central bank on Wednesday raised interest rates for the first time since 2023 and flagged further increases in borrowing costs in the months ahead. The Fed's overnight benchmark interest rate was raised by a quarter of a percentage point to the 3.75%-4.00% range.