US housing starts fell 5.2% in September, defying expectations for a 1.9% increase, according to Census Bureau data released Tuesday.
Housing starts, which measure the beginning of construction on new homes, dropped to a seasonally adjusted annual rate of 1.221 million units from a revised 1.288 million in August.
Compared with September last year, starts declined 7.4%.
Single-family housing starts decreased 4.6% from August to an annual rate of 859,000 units. Starts in buildings with five or more units stood at 349,000.
Building permits, an indicator of future construction activity, fell 0.2% to a seasonally adjusted annual rate of 1.4 million units.
The decline was smaller than expectations for a 1.3% drop. August's permits figure was revised to 1.403 million.
Permits were down 3% compared to a year earlier.
Single-family permits fell 4% month-on-month to an annual rate of 845,000 units, while authorizations for buildings with five or more units totaled 503,000.
Housing completions rose 2.2% from August to an annual rate of 1.192 million units but remained 14% below their year-earlier level.
