Homebuilder sentiment is at a 14-year low

The AI boom is sucking up all the capital.

The Federal Reserve is raising rates to try to cool inflation.

And one sector is bearing the brunt of the pain from both: housing .

The big picture: The situation is lose-lose for both homebuilders and homebuyers.

Builders are facing more expensive capital and bidding for scarce construction-related resources.

Would-be buyers are being quoted some of the highest mortgage rates of this century.

New September housing starts data out Tuesday morning puts an exclamation point on what has been a slow-moving disaster for a sector that plays an outsized role in the economic cycle and in Americans' basic living standards.

By the numbers: The number of housing units started by builders fell 5.2% last month, the Census Bureau said , to 1.22 million.

It's down 7.4% year over year and near post-pandemic lows.

Starts of single-family homes fell 4.6% to their lowest level since March 2023.

Pending home sales fell 7.3% last month, the National Association of Realtors said Tuesday morning, to the lowest since the data was tracked going back to 2001.

Homebuilder sentiment fell this month to its lowest level since 2012, the National Association of Home Builders said Monday.

State of play: The average 30-year fixed-rate mortgage rate was 7.4% earlier this month, Freddie Mac said in its most recent weekly reading.

The rate was briefly higher than that in 2023, but has not been consistently above that level since the fall of 2000.