NAHB analysis of Census Construction Spending data shows that total private residential construction spending for July registered a seasonally adjusted rate of $445.5 billion, slightly up from the June downwardly revised estimate.
The monthly gains are largely attributed to the strong growth of private construction spending on home improvements that rose to a seasonally adjusted annual rate of $147.5 billion in July, up by 1.5 percent since last month. Meanwhile, spending on single-family and multifamily both declined in July. Single-family spending edged down to $238.1 billion in July, down 0.2 percent over the revised June estimate. After hitting the record-breaking highs earlier this year, multifamily spending decreased to $59.8 billion, down by 0.6 percent since June. On an annual basis, however, multifamily spending increased by 19.8 percent. Single-family spending was also 1.7 percent higher since July 2015.
The NAHB construction spending index shows the strong growth in new multifamily construction since 2010, while new single-family construction and home improvements spending have drifted upward at a more modest pace. NAHB anticipates growth for new single-family spending over the rest of 2016, consistent with the modest rise in single-family starts.
The pace of private nonresidential construction spending rose 1.7 percent on a monthly basis, and was 7.1 percent higher than the July 2015 estimate. The largest contribution to this year-over-year nonresidential spending gain was made by the class of office (30.3 percent increase), followed by lodging (28.0 percent increase) and commercial (13.5 percent increase).
This post was originally published on NAHB’s blog, Eye on Housing.