NAHB analysis of Census Construction Spending data shows that total private residential construction spending dipped 0.5 percent to a seasonally adjusted annual rate of $568.3 billion in June. Nevertheless, on a quarterly basis, private residential construction spending climbed 4.0 percent in the second quarter, the largest quarterly gain since 2017. Moreover, total private residential construction spending was 8.8 percent higher than a year ago.
This monthly decline is largely attributed to the significant drop in both single-family and multifamily construction spending in June. This is in line with the soft readings of single-family and multifamily housing starts in June. On a monthly basis, single-family construction spending experienced a modest dip of 0.4 percent to a $287.5 billion annual pace in June. Multifamily construction spending decreased 2.8 percent. Remodeling spending edged up 0.1% in June. However, over the year, spending on single-family, multifamily, and home improvement all experienced gains, that is 6.8 percent, 1.8 percent, and 13.8 percent, respectively.
The NAHB construction spending index, which is shown in the graph below (the base is January 2000), illustrates the strong growth in new multifamily construction from 2010 to April 2017, and an ongoing steady growth in single-family construction.
Spending on private nonresidential construction increased 3.7 percent over the year to a seasonally adjusted annual rate of $451.5 billion. The annual nonresidential spending increase was mainly due to more spending on the class of power ($7.0 billion), followed by office ($5.5 billion), and transportation ($2.8 billion).