By Xavier Fontdegloria

Construction of new homes in the U.S. decreased in September after rising the previous month, according to data from the Commerce Department released Tuesday. Here are the main takeaways from the report:

--Housing starts, a measure of U.S. homebuilding, decreased 1.6% in September compared with August, to a seasonally adjusted annual rate of 1.555 million. The reading is below the consensus forecast from The Wall Street Journal poll of economists, who expected starts to fall 0.3% to an annual pace of 1.61 million.

--The current level of starts is up 7.4% compared with the same month a year earlier.

--In August, housing starts were downwardly revised to 1.580 million from an earlier estimate of 1.615 million.

--Monthly housing starts data are volatile and are often revised. Data for September came with a margin of error of 11.4 percentage points.

--Residential permits, which can be a bellwether for future home construction, fell by a sharp 7.7% in September on month, to a seasonally adjusted annual rate of 1.589 million. The figure compares with economists' forecasts of a 3.4% decline to an annual pace of 1.67 million.

--U.S. housing starts report for September compares with October's indicator compiled by the National Association of Home Builders, which showed confidence in the single-family housing market increasing to strong levels.

--Housing demand remains robust amid low mortgage rates but affordability challenges are growing due to the rise of material prices and shortages, which are pushing up home prices and construction costs.

Write to Xavier Fontdegloria at xavier.fontdegloria@wsj.com

(END) Dow Jones Newswires

October 19, 2021 09:00 ET (13:00 GMT)