Housing starts took a significant hit from Hurricane Harvey, which drove starts down sharply in the South region and caused the overall national number to come in 4.7% behind August to an annualized rate of 1,127,000. Starts, however, were up 6.1% from a year earlier.

Single-family housing starts in September were at a rate of 829,000, 4.6% below the revised August figure of 869,000. That decline was driven entirely by the South region, the largest, which posted a 9.3% decline in overall starts and a 15.3% drop in single family. In contrast, single-family starts were up 5.8% in the Northeast, up 10.5% in the Midwest and up 8.1% in the West.

Likewise, on a year-over-year basis, starts were up 4.2% overall and up 17.7% for single family in the Northeast; up 2.7% and 10.5% respectively in the Midwest; and up 24.8% and 26.1% respectively in the West. Those annual gains were wiped out by declines of 9.3% and 15.3% in the South.

Building permits in September were at a seasonally adjusted annual rate of 1,215,000, 4.5 % below the revised August rate of 1,272,000 and 4.3% below the September 2016 rate of 1,270,000. The decline was driven by the multifamily sector, which posted a 17.4% decline. Single-family authorizations in September were at a rate of 819,000, 2.4% above the revised August figure of 800,000 and 9.3% ahead of the same month last year.

Permits were up 20.7% in the Northeast, up 0.5% in the Midwest, up 1% in the West but down 0.9% in the South.

Housing completions in September were at a seasonally adjusted annual rate of 1,109,000, 1.1% above the revised August estimate of 1,097,000 and is 10.3% above the September 2016 rate of 1,005,000. Single-family housing completions in September were at a rate of 781,000, 4.6% above the revised August rate of 747,000.

Lawrence Yun, chief economist at the National Assocation of Realtors, was concerned with the dropoff of permits in the West. "The one month fall in new home construction, especially in the South region in light of Hurricane recovery, is understandable. What is frustrating and hard to comprehend is the drop in total permits in the West region. Home prices have been rising too fast in the West, and several metro areas are in dire need of new home construction. If housing shortages continue, along with the commensurate affordability challenges, then expect new job creation to begin shifting away from the West to other parts of the country.”