US housing starts fall to lowest level since 2020 in worrying sign for the economy

• August US housing starts fell to its lowest level in three years in a worrying sign for the economy.
• The slowdown in homebuilding activity comes as mortgage rates continue to linger above 7%.
• "The sharp drop in housing starts is concerning because housing has been one of the pillars of the economy that has held up," a CIO said. 

A slowdown in homebuilding activity suggests higher mortgage rates are starting to take their toll on an important part of the economy.

US housing starts, which refers to the beginning of construction of a new home, plunged 11% in August to 1.23 million, representing its lowest level since June 2020. The results were lower than economist expectations of 1.44 million units.