Total private residential construction spending decreased in February after three consecutive months of growth. The unusually cold winter may have finally caught up to total residential spending and contributed to a slight month-over-month decline. Total private residential construction spending dropped to a seasonally adjusted annual rate of $360.4 billion according to the latest Census estimates. The current reading is a decrease of 0.8% from the revised January estimate, but 13.5% higher than one year ago.
Month-over-month single-family spending decreased by 1.1% as there was some weakness in the value of housing units started. The home improvement category decreased by 1.3%. Multifamily construction rebounded from a drop in January with a strong month-over-month increase of 2.6%.
The figures show significant improvements in residential construction spending for all categories from the prior year. From February 2013, on a 3-month moving average basis, construction spending in single-family increased by 18.3%, multifamily increased by 29.9%, and remodeling increased by 11.1%.
Although housing starts were down slightly in February, less weather-dependent permits were up almost 8% to 1,018,000. As the weather improves construction spending should pick up provided key supply chain issues, which remain a concern for many builders, do not restrict growth.