Housing Starts, Permits Fall; Jobless Claims Signal Labor Market Strength — Evening Brief – 09.17.26

U.S. housing starts fell 2.6% month-over-month in August to a seasonally adjusted annual rate of 1.275 million, missing the consensus forecast of 1.315 million and dropping below the upwardly revised July rate of 1.309 million, according to data released Thursday by the U.S. Census Bureau.

Privately owned housing starts dipped 1.2% compared to August 2025. Building permits similarly weakened, falling 2.7% monthly to an annual rate of 1.394 million, trailing the 1.400 million consensus. Meanwhile, housing completions fell sharply, plunging 11.9% from July and 27.1% year-over-year to 1.128 million. Pending home sales ticked up 0.3% in August to 71.2, though contract signings remain roughly 30% below pre-pandemic levels.

“Nationally, contract signings today are running roughly 30% below where they were in the years leading up to the pandemic,” said NAR Chief Economist Lawrence Yun. “Transaction activity peaked in 2021, when mortgage rates fell to near 3%, a historic low, and has not approached that level since.”

In contrast to real estate cooling, the broader economy demonstrated ongoing labor market stability. Initial jobless claims for the week ended September 12 dropped by 10,000 to 196,000, beating expectations of 207,000. Continuing claims fell to 1.730 million for the week ended September 5. The data follows the Federal Reserve’s decision to raise the federal funds rate by 25 basis points to 3.75%–4.00%.

Regional manufacturing also outperformed expectations. The Philly Fed Manufacturing Index retreated to 37.8 in September from 47.4 in August, surpassing the 31.3 consensus forecast as new orders and employment indices remained positive.