topic-fed-rates

U.S. housing starts fell 5.2% in September 2026 to a seasonally adjusted annual rate of 1,221,000, the Census Bureau and the Department of Housing and Urban Development reported Tuesday, Oct. 20. The September 2026 housing starts figure was 7.4% below the September 2025 pace, and it arrived with the average 30-year mortgage rate at 7.4%.

Single-family starts, the largest part of the market, dropped 4.6% to an 859,000 annual rate from a revised 900,000 in August, according to the report. Starts of units in buildings with five or more units ran at a 349,000 rate. The Census Bureau flagged both the monthly and the year-over-year changes in total starts as not statistically significant, meaning the agency cannot rule out that the actual change was zero.

Building permits, which signal construction in the months ahead, came in at a 1,400,000 annual rate. That was 0.2% below the revised August rate of 1,403,000 and 3.0% below September 2025. Single-family permits fell 4.0% to 845,000, while permits for buildings with five or more units stood at 503,000.

Housing completions rose 2.2% from August to a 1,192,000 rate but remained 14.0% below the September 2025 rate of 1,386,000. Single-family completions slipped 2.4% to 840,000.

The report lands in a period of elevated borrowing costs. Freddie Mac’s Primary Mortgage Market Survey for the week of Oct. 15 put the average 30-year fixed mortgage rate at 7.40%, unchanged from the prior week and up from 6.27% a year earlier. The 15-year fixed rate averaged 6.71%.

The Federal Reserve raised its benchmark federal funds rate by a quarter percentage point on Sept. 16 to a range of 3.75% to 4%, saying in its statement that “inflation remains elevated.” The Bureau of Labor Statistics reported Oct. 14 that the consumer price index rose 3.7% over the 12 months ending in September, with the core index, which excludes food and energy, up 2.6%. The next Fed meeting is scheduled for Oct. 27–28, according to the Federal Reserve’s calendar.

The full report, “Monthly New Residential Construction, September 2026,” is available from the Census Bureau.

The Federal Reserve on Wednesday, Oct. 7, released the minutes of the Federal Open Market Committee’s Sept. 15-16 meeting, at which the committee raised the target range for the federal funds rate by a quarter percentage point to 3.75 percent to 4 percent. The minutes state that most participants assessed that “another increase in the target range for the federal funds rate would likely be appropriate by year end,” while adding that future decisions would depend on incoming data.

The vote was 12-0, with Chair Kevin Warsh and the other voting members, including John C. Williams, Michael S. Barr, Michelle W. Bowman, Lisa D. Cook, Beth M. Hammack, Philip N. Jefferson, Neel Kashkari, Lorie K. Logan, Anna Paulson, Jerome H. Powell and Christopher J. Waller, all in favor. According to the minutes, all participants supported the increase, and several said they viewed the current policy rate as “not restrictive or only mildly restrictive.”

On inflation, participants said it “remained elevated” and that they had “not seen sufficient progress on lowering inflation in recent months.” They generally assessed the risks to inflation as skewed to the upside. On employment, participants judged the labor market to be stable and close to maximum employment, with risks broadly balanced. Participants described economic activity as expanding at a solid pace, supported by business investment tied to artificial intelligence and by consumer spending, though several noted strains on low- and moderate-income households from higher energy prices.

In its Sept. 16 post-meeting statement, the committee said “inflation remains elevated” and that the rate increase “will support a timelier return to the Committee’s 2 percent goal.” The Board of Governors also raised the interest rate paid on reserve balances to 3.90 percent and the primary credit rate to 4.0 percent, effective Sept. 17. The move was the committee’s first rate increase since 2023.

The committee’s next scheduled meeting is Oct. 27-28.

Source: Federal Reserve, Minutes of the Federal Open Market Committee, September 15-16, 2026; release announcement.