Private residential construction spending fell by 0.9% in August, the third consecutive month spending has declined, according to NAHB’s analysis of the Census Construction Spending data. While spending declined on a monthly basis, private residential construction spending is 12.5% higher on a year-over-year basis.
The monthly declines are largely attributed to lower spending on single-family construction. Single-family construction spending dropped 2.9% in August, after a decline of 4.3% in July. Rising mortgage rates and supply chain disruptions put a damper on the housing market. Nonetheless, single-family construction spending was virtually unchanged over a year ago.
Multifamily construction spending edged up by 0.4% in August, after a decrease of 0.4% in July. However, spending on multifamily construction was 0.2% below the August 2021 estimates.
Private residential improvements rose by 1% in August and was 37.2% higher over a year ago, as summer is the best time for remodeling. Keep in mind that construction spending reports the value of property put-in-place, so it is a measure of property value placed in service at the end of the construction pipeline.
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