New Home Construction Rebounds in September, But Permits Fall as High Rates Dampen Demand

New home construction rebounded 7% in September after a steep drop in August, despite high mortgage rates.

Building permits, which indicate future construction, fell 4.4% in September compared to last year.

Low supply of existing homes provides a favorable backdrop for homebuilders, though high prices due to low supply may reduce affordability.

Homebuilder sentiment dropped to the lowest level since January, as higher rates price out some buyers.

Mortgage rates remain elevated as the Fed signals it may hold interest rates at peak levels longer than expected.