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US single-family homebuilding rebounded in September, boosted by demand for new construction amid an acute housing shortage, but the highest mortgage rates in nearly 23 years could slow momentum and delay the overall housing market recovery.

That was flagged by other data on Wednesday showing applications for loans to purchase a home plunged last week to levels last seen in 1995. In addition, the jump in housing starts partially recouped the decline in August.

The rebound in homebuilding probably reflected permits approved several months ago before mortgage rates broke above 7%. A survey this week showed confidence among single-family homebuilders slumped to a nine-month low in October, with builders reporting lower levels of traffic.

“In the very short-term, single-family construction activity is likely to increase with permits rising in every month of 2023 thus far, but at some point mortgage rates are likely to put a lid on new construction activity for home purchase,” said Conrad DeQuadros, senior economic advisor at Brean Capital in New York.

Single-family housing starts, which account for the bulk of homebuilding, increased 3.2% to a seasonally adjusted annual rate of 963,000 units last month, the Commerce Department said. Data for August was revised to show starts dropping to a rate of 933,000 units instead of 941,000 units as previously reported.

Single-family starts rose in the Midwest, West and the densely populated South, but plunged 19.0% in the Northeast.

The housing market had shown signs of stabilizing before mortgage rates resumed their upward trend late in the summer, with the rate on the popular 30-year fixed mortgage vaulting above 7% in August. According to the Mortgage Bankers Association, the average contract interest rate on a 30-year fixed-rate mortgage rose 3 basis points to 7.70% last week, the highest since November 2000.

Mortgage rates have risen in tandem with the yield on the benchmark 10-year Treasury note, which has spiked to more than a 16-year high, mostly because of expectations that the Federal Reserve will keep interest rates higher for longer in response to the economy’s resilience. Since March 2022, the central bank has raised its benchmark overnight interest rate by 525 basis points to the current 5.25%-5.50% range.

Residential investment has contracted for nine straight quarters, the longest such stretch since the housing market bubble burst, triggering the 2008 global financial crisis and the Great Recession. That downturn probably extended into the third quarter, though overall gross domestic product growth last quarter was likely the fastest since late 2021, thanks to a tight labor market that is underpinning consumer spending.

Stocks on Wall Street were trading lower amid mounting tensions in the Middle East. The dollar rose against a basket of currencies. U.S Treasury prices fell, with the yield on the 10-year bond rising to the highest level since July 2007.

Financial markets expect the Fed will leave rates unchanged at its Oct. 31-Nov. 1 policy meeting, according to CME Group’s FedWatch Tool, given the surge in Treasury yields.

Starts for housing projects with five units or more soared 17.1% to a rate of 383,000 units in September. Overall housing starts accelerated 7.0% to a rate of 1.358 million units in September. Economists polled by Reuters had forecast starts rebounding to a rate of 1.380 million units.

Permits for future construction of single-family homes rose 1.8% to a rate of 965,000 units, the highest since May 2022. Though permits are a leading indicator, economists cautioned against being too optimistic about homebuilding prospects, citing the soaring mortgage rates and souring builder sentiment.

“It’s not lights out for homebuilding, but we don’t know how many more body blows with the Fed’s interest-rate hammer the nation’s housing sector can withstand,” said Christopher Rupkey, chief economist at FWDBONDS in New York.

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Entertainment

Eurovision Song Contest 2025 in pictures

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Eurovision Song Contest 2025 in pictures

It’s a night of glitz, glamour and high camp, in which pop, rock, disco and opera all come together in one big Eurovision cocktail.

This year’s acts incorporate a giant gold microphone, a sauna – and of course pyrotechnics and fake ice aplenty.

Here are some of the best moments on stage in Basel.

Tommy Cash, singing Espresso Macchiato for Estonia. Pic: Reuters
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Tommy Cash, singing Espresso Macchiato for Estonia. Pic: Reuters

Kyle Alessandro performs Lighter for Norway. Pic: AP
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Kyle Alessandro performs Lighter for Norway. Pic: AP

Yuval Raphael performs New Day Will Rise for Israel. Pic:AP
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Yuval Raphael performs New Day Will Rise for Israel. Pic:AP

JJ singing Wasted Love for Austria. Pic: Reuters
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JJ singing Wasted Love for Austria. Pic: Reuters

VAEB performing Roa for Iceland. Pic: AP
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VAEB performing Roa for Iceland. Pic: AP

Remember Monday perform What The Hell Just Happened for the UK. Pic: AP
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Remember Monday perform What The Hell Just Happened for the UK. Pic: AP

Ziferblat perform Bird Of Pray for Ukraine. Pic: AP
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Ziferblat perform Bird Of Pray for Ukraine. Pic: AP

Melody perform Esa Diva for Spain. Pic: AP
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Melody perform Esa Diva for Spain. Pic: AP

Lucio Corsi performing Volevo Essere Un Duro for Italy. Pic: Reuters
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Lucio Corsi performing Volevo Essere Un Duro for Italy. Pic: Reuters

Tautumeitas performing Bur Man Laimi for Latvia. Pic: Reuters
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Tautumeitas performing Bur Man Laimi for Latvia. Pic: Reuters

Erika Vikman performing Ich Komme for Finland. Pic: Reuters
Erika Vikman, representing Finland, performs "ICH KOMME", during the Grand Final of the 2025 Eurovision Song Contest in Basel, Switzerland, May 17, 2025. REUTERS/Denis Balibouse
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Erika Vikman performs Ich Komme for Finland. Pics: Reuters

Claude singing C'est La Vie for The Netherlands. Pic: Reuters
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Claude singing C’est La Vie for The Netherlands. Pic: Reuters

Abor & Tynna sing Baller for Germany. Pic: AP
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Abor & Tynna sing Baller for Germany. Pic: AP

KAJ perform Bara Bada Bastu for Sweden. Pic: AP
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KAJ perform Bara Bada Bastu for Sweden. Pic: AP

Shkodra Elektronike performing Zjerm for Albania. Pic: AP
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Shkodra Elektronike performing Zjerm for Albania. Pic: AP

Louane sings Maman for France. Pic: AP
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Louane sings Maman for France. Pic: AP

PARG performs Survivor for Armenia. Pic: AP
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PARG performs Survivor for Armenia. Pic: AP

Klavdia sings Asteromata for Greece. Pic: AP
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Klavdia sings Asteromata for Greece. Pic: AP

Gabry Ponte performing Tutta L'Italia for San Marino. Pic: AP
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Gabry Ponte performing Tutta L’Italia for San Marino. Pic: AP

JJ is crowned the winner of Eurovision 2025. Pic: Reuters
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JJ is crowned the winner of Eurovision 2025. Pic: Reuters

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Sports

Journalism rallies to win Preakness; Gosger 2nd

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Journalism rallies to win Preakness; Gosger 2nd

BALTIMORE — Journalism won the 150th running of the Preakness Stakes on Saturday, coming from behind down the stretch to make good on the lofty expectations of being the odds-on favorite in the middle leg of the Triple Crown two weeks after finishing second to Sovereignty in the Kentucky Derby.

Finishing first in a field of nine horses that did not include Sovereignty but featured some of the best competition in the country, Journalism gave trainer Michael McCarthy his second Preakness victory. It is Umberto Rispoli’s first in a Triple Crown race, and he is the first jockey from Italy to win one of them.

Gosger was second by a half-length after getting passed by Journalism just before the wire. Sandman was third and Goal Oriented fourth. Journalism went 1 3/16 miles in 1:55.37.

Journalism thrived on a warm day that dried out the track after torrential rain fell at Pimlico Race Course for much of the past week. Those conditions suited him better than the slop at Churchill Downs in the Derby.

Sovereignty did not take part after his owners and trainer Bill Mott decided to skip the Preakness, citing the two-week turnaround, and aimed for the Belmont on June 7. That made this a fifth time in seven years that the Preakness, for various reasons, was contested without a Triple Crown bid at stake.

But Journalism staked his claim for 3-year-old horse of the year by winning the $2 million American classic race run at the old Pimlico Race Course for the last time before it’s torn down and rebuilt. The Preakness is set to be held at nearby Laurel Park, between Baltimore and Washington, D.C., next year before a planned return to the new Pimlico in 2027.

Journalism is the first horse to win the Preakness after running in the Kentucky Derby since Mark Casse-trained War of Will in 2019. Only two others from the 19 in the Derby participated in the Preakness: Casse’s Sandman and fellow Hall of Famer D. Wayne Lukas’ American Promise.

Lukas, the 89-year-old who has saddled the most horses in Preakness history, referred to McCarthy once this week as “the new guy.” This was just McCarthy’s second, and he’s 2 for 2 after Rombauer sprung the upset as an 11-1 long shot in 2021.

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World

Donald Trump says he has call with Putin planned – as Ukraine condemns Russia over bus attack

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Donald Trump says he has call with Putin planned - as Ukraine condemns Russia over bus attack

Donald Trump has said he will speak to Vladimir Putin and Volodymyr Zelenskyy separately on Monday in a bid to secure a ceasefire deal between Russia and Ukraine.

The US president made the announcement on Truth Social – shortly after the Ukrainian president condemned Russia for the “deliberate killing of civilians” after a drone hit a bus in north-eastern Ukraine.

Mr Trump said he will speak to Mr Putin over the phone. He will then talk with Mr Zelenskyy and “various members of NATO”, he wrote.

In an all-caps post, he said: “HOPEFULLY IT WILL BE A PRODUCTIVE DAY, A CEASEFIRE WILL TAKE PLACE, AND THIS VERY VIOLENT WAR, A WAR THAT SHOULD HAVE NEVER HAPPENED, WILL END. GOD BLESS US ALL!!!”

The Ukrainian town of Bilopillia today declared a period of mourning lasting until Monday after nine people were killed in a Russian drone attack – which occurred just hours after Kyiv and Moscow held peace talks.

Seven others were injured, Ukrainian authorities said. The bus was evacuating civilians from a frontline area when the drone hit, the country’s national police said.

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Nine killed in Russian strike on bus

A “father, mother and daughter” were among the dead, Mr Zelenskyy said, writing on Telegram: “All the deceased were civilians. And the Russians could not have failed to understand what kind of vehicle they were targeting.”

The attack has also been condemned by British Foreign Secretary David Lammy, who said he was “appalled”.

“If Putin is serious about peace, Russia must agree to a full and immediate ceasefire, as Ukraine has done,” he wrote on X.

Representatives for Kyiv and Moscow met for direct peace talks in Istanbul, Turkey, just hours before the drone attack.

While the discussions – which were not attended by the Mr Putin or Mr Zelenskyy – did not result in a truce, both countries agreed to exchange 1,000 prisoners in their biggest swap yet.

Ukraine’s intelligence chief, Kyrylo Budanov, said on national television the exchange could happen as early as next week.

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What happened at Ukraine talks?

Russia ‘threatened eternal war’ at peace talks

After a Ukrainian official yesterday said Russia made “unacceptable” demands during the discussions, a source from the Kyiv delegation has now told Sky News that Moscow threatened “eternal war”.

Separately, a senior Kyiv official said Russia’s proposed ceasefire terms included the full withdrawal of troops from four regions of Ukraine: Donetsk, Zaporizhzhia, Kherson and Luhansk.

Moscow also called for international recognition that those regions and Crimea – annexed in 2014 – are Russian and for Ukraine to become a neutral state, with no allied troops stationed there, they said.

The Kremlin declined to comment on the matter.

Read more:
What happened last time Putin and Zelenskyy met?
Ukrainians tortured and killed in Russian jails
Analysis: the chilling moment in Russia-Ukraine talks

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Ukraine has rallied support from its allies following the talks, and a number have spoken out.

French President Emmanuel Macron said: “Today, what do we have? Nothing. And so I tell you, faced with President Putin’s cynicism, I am sure that President Trump, mindful of the credibility of the United States, will react.”

The EU is working on a new package of sanctions against Moscow, European Commission President Ursula von der Leyen said.

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