US housing starts fall 5.2% in September as pending home sales sink to a record low

US housing starts fell 5.2% in September to an annual rate of 1.221 million, and the second report in a row to show a drop¹. Economists had expected a reading of 1.3 million and a 2% rise over the month¹. The figures come from the Census Bureau’s monthly report on new residential construction for September 2026³.

Contract activity for existing homes plunged 7.3% in September, the National Association of Realtors said⁵. Pending home sales decreased by that amount in the month³, and the drop took the measure to a record low².

Why it matters to investors

The two reports point the same way: fewer homes are being started and fewer existing homes are going under contract^1,3. Starts missed the consensus by a wide margin, and the direction was the opposite of what forecasters expected¹. A record low in signings, reached in the same month that builders cut back, leaves both halves of the housing market weaker at once^1,2,5.

Markets read the numbers as a sign of slowing growth. Gold was weaker and silver mixed as weak housing data offset rising oil prices⁴. Traders were also waiting for a consumer sentiment reading, and weaker labour-market and business activity data could reinforce concerns about slowing growth and temper expectations, according to market commentary⁴. Separately, US consumer sentiment has fallen on concerns about prices and the economy².

The housing data also feed the political argument over the economy. One commentary on the figures set the plunge in contract activity alongside the consumer sentiment poll and the remarks of White House economic adviser Kevin Hassett⁵. The construction miss, the decline in signings and the fall in sentiment arrived within the same reporting week, which is why traders treated them together^1,2,3,4.

What to watch

The next readings on consumer sentiment and labour-market activity will show whether the housing weakness is isolated or part of a broader slowdown^2,4. Investors will also watch whether starts recover from a 1.221 million pace that already fell short of the 1.3 million forecast¹.

For pending sales, the question is whether September’s 7.3% drop marks a floor or the start of a longer slide in signed contracts, after the measure reached a record low^2,3,5. The National Association of Realtors’ next monthly reading will answer that⁵.