The American Institute of Architects monthly Architecture Billings Index came in at 51.7, a 1.6 point decrease from August's score of 53.3. The ABI is a leading economic indicator of construction activity in the U.S. and reflects a nine- to 12-month lead time between architecture billings and construction spending nationally, regionally, and by project type. A score above 50 represents an increase in billings from the previous month, while a score below 50 represents a contraction.
"The biggest thing that stuck out to me in the latest report was the drop in billings for the multifamily residential space," says Ali Wolf, the chief economist of ARCHITECT's parent company, Zonda. "There was this belief that higher mortgage rates would push potential homebuyers to the rental market, when in fact, higher rates result in a slower conversion from rental to homeownership but not a pop in demand. There’s another consideration, though—costs. With rents still up compared to last year and inflation exceeding wage growth, there has been some softening in the rental market. That, in turn, has resulted in a shift in sentiment towards new developments in the sector.”
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