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Housing Starts Took Nose Dive in September

Home construction fell 5.3 percent in September, the Commerce Department said Wednesday, an indication that rising mortgage rates may be weighing on the market.

(CN) — Home construction fell 5.3 percent in September, the Commerce Department said Wednesday, an indication that rising mortgage rates may be weighing on the market.

According to the government, housing starts declined last month to a seasonally adjusted annual rate of 1.2 million, down from 1.27 million in August.

Economists responded to the news Wednesday by suggesting the combination of higher borrowing costs and rising home values has made home ownership less affordable.

Mortgage buyer Freddie Mac says that the average 30-year fixed-rate mortgage jumped to 4.9 percent last week, the highest level since 2011.

Permits, an indicator of future activity, fell 0.6 percent to an annual rate of 1.24 million.

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