Private residential construction fell the second consecutive month as rising mortgage rates and elevated construction costs put a damper on the market, according to the NAHB. While private residential construction decreased 1.5% in July, spending was 14.1% higher on a year-over-year basis, according to an analysis of Census Construction Spending data.
The monthly declines are largely attributed to lower spending on single-family and multifamily. Spending on single-family construction dropped 4% in July, as single-family starts fell to the lowest reading since June 2020 and builder confidence plunged in July. Multifamily construction spending edged down by 0.6% in July, after an increase of 0.6% in June. Private residential improvements rose by 1.5% in July and was 38.3% 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’s the measure of property at the end of the construction pipeline.
Spending on private nonresidential construction inched up by 0.4% in July to a seasonally adjusted annual rate of $503.9 billion. The monthly nonresidential spending increase was mainly due to more spending on the class of commercial property ($0.7 billion), followed by the manufacturing category ($0.6 billion), and the amusement and recreation category ($0.2 billion).
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