Spending on single-family construction declined 2.6% in October as private residential construction spending fell for the fifth consecutive month, according to an analysis by the NAHB. Despite the monthly declines, the annual pace of spending, $887.2 billion, is 8.6% higher compared with a year ago.

The monthly decline is largely attributed to lower spending on single-family construction. Single-family construction spending dropped 2.6% in October, after a decline of 2.7% in September. Compared to a year ago, it is 5.4% lower. High mortgage rates, flagging housing demand, and supply-chain disruptions have put a damper on the housing market.

Multifamily construction spending edged up by 0.6% in October, after an increase of 0.64% in September.

The NAHB construction spending index illustrates how construction spending on single-family has slowed since early 2022 under the pressure of supply-chain issues and elevated interest rates. Multifamily construction held steady in recent months, while improvement spending has increased pace since early 2019. Before the COVID-19 crisis hit the U.S. economy, single-family and multifamily construction spending experienced solid growth from the second half of 2019 to February 2020, followed by a quick post-covid rebound since July 2020.

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