Total private residential construction spending rose 0.4% in August compared with July to a seasonally adjusted annual rate of $786.6 billion while that activity was 24.3% higher than a year ago, according to an analysis of U.S. Census Construction Spending data by the National Association of Home Builders.
The monthly gains are attributed to the strong growth of spending on improvements, while spending on single-family and multifamily constructions slipped. Spending on improvements rose 2.5% in August, after a 0.2% dip in July. Single-family construction spending decreased to a $413.4 billion annual pace in August, down by 0.7% over the downward revised July estimates. Multifamily construction spending dipped 0.8% in August. Homebuilding is still facing the supply chain issues, the rising material costs and labor shortages.
The NAHB construction spending index, which is shown in the graph below (the base is January 2000), illustrates the solid growth in single-family construction and home improvement from the second half of 2019 to February 2020, before the COVID-19 hit the U.S. economy, and the quick rebounds since July 2020. New multifamily construction spending has picked up the pace after a slowdown in the second half of 2019.
Advertisement
Related Stories
Affordability
How Much Must American Renters Earn to Afford Average Rental Prices?
US rents have increased 3.6% year-over-year, pushing the amount renters must earn to afford average rents to around $80K
Market Data + Trends
Survey Shows Confidence Drop in Multifamily Development in Q1 2024
Current sentiment has NAHB projecting that multifamily starts will decrease by 28% during 2024 as developer activity slows
Planning + Development
Developers Target Hotels for Adaptive Reuse Projects in Major US Cities
Of the growing number of adaptive reuse projects in 2023, hotel conversions stole the show, surpassing office-to-apartment conversions