American Dream Of Homeownership Slips Further Away As Construction Falls

American homebuilders broke ground on fewer houses in September as surging mortgage rates and construction costs delivered another setback to the nation’s already strained housing market.

New Census Bureau data released Tuesday showed single-family housing starts falling 4.6%, while permits for future single-family construction dropped 4.0%. The pullback came as the average 30-year mortgage rate climbed to 7.40% and builder confidence sank to its lowest level in 14 years, putting additional pressure on Americans trying to purchase their first home, with the average first-time homebuyer reaching a record high of 40 years old.

Single-family housing starts fell to a seasonally adjusted annual rate of 859,000 in September from a revised 900,000 in August, according to the Census Bureau’s report. Single-family building permits, an indicator of future construction, declined to an annual rate of 845,000 from 880,000.

Across single-family and multifamily projects combined, housing starts declined 5.2% to an annual rate of 1.221 million, down 7.4% from a year earlier. Total building permits edged down just 0.2% to 1.4 million, reflecting a less severe pullback outside the single-family market.

The construction slowdown coincided with a jump in the cost of financing a home. Freddie Mac reported Thursday that the average 30-year fixed mortgage rate reached 7.40%, up from 6.27% a year earlier and near its highest level in three years.

At September’s median existing-home price of $417,500, reported by the National Association of Realtors