Private residential construction spending decreased 1.6% in June, according to NAHB’s analysis of the Census Construction Spending data. The month-over-month decline was the first decrease since May 2020, though private construction spending was 15.6% higher on a year-over-year basis.
The monthly declines are largely attributed to lower spending on single-family and improvement. Spending on single-family construction dropped 3.1% in June, as housing starts fell to a two-year low and builder confidence plunged in June with home building facing higher interest rates and construction costs. Private residential improvements inched down 0.3% in June. Multifamily construction spending increased 0.4% in June after a dip of 0.35% in May, and it was 0.1% lower from a year ago.
The NAHB construction spending index illustrates how construction spending on single-family, multifamily has slowed down the pace since early 2022 under the pressure of supply-chain issues and elevated interest rates. Before the COVID-19 hit the U.S. economy, single-family construction and home improvement experienced solid growth from the second half of 2019 to February 2020, and the quick rebound since July 2020.Read More