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Daily Read: Business

Housing Market Slumps as Fed Eyes Rate Hikes

September data shows the U.S. housing market is weakening, with building permits, new starts and pending sales falling sharply below Wall Street forecasts. The National Association of Realtors reported a 7.3% drop in pending sales, the largest decline since 2001, and a 11.3% year‑over‑year fall. Housing starts fell 5.2% annually, while single‑family permits slipped to 845,000, the lowest level since 2023. Mortgage rates topped 7% for most of September, rising to 7.6% at month‑end, tightening affordability and dampening demand. Analysts warn that further Fed rate hikes could push mortgage rates higher, deepening the slowdown. Despite higher borrowing costs, some economists note that AI‑driven inflation may offset weaker housing demand. The Fed is balancing its inflation fight with the risk of a housing slump, and markets anticipate a possible quarter‑point hike in December. The outlook suggests continued pressure on housing activity through 2027, with affordability headwinds dominating growth prospects.

· CNBC

The essential points

  1. 01Pending home sales fell 7.3% in September, the steepest decline since 2001
  2. 02Housing starts dropped 5.2% annually, below the 0.4% forecast
  3. 03Mortgage rates topped 7% for most of September, ending at 7.6%
  4. 04Fed may raise rates again, potentially pushing mortgage costs higher
The full brief

September data shows the U. S. housing market is weakening, with building permits, new starts and pending sales falling sharply below Wall Street forecasts. The National Association of Realtors reported a 7. 3% drop in pending sales, the largest decline since 2001, and a 11.

3% year‑over‑year fall. Housing starts fell 5. 2% annually, while single‑family permits slipped to 845,000, the lowest level since 2023. Mortgage rates topped 7% for most of September, rising to 7. 6% at month‑end, tightening affordability and dampening demand.

Analysts warn that further Fed rate hikes could push mortgage rates higher, deepening the slowdown. Despite higher borrowing costs, some economists note that AI‑driven inflation may offset weaker housing demand. The Fed is balancing its inflation fight with the risk of a housing slump, and markets anticipate a possible quarter‑point hike in December. The outlook suggests continued pressure on housing activity through 2027, with affordability headwinds dominating growth prospects.