Total private residential spending – single-family, multifamily, and home improvements – fell slightly in August (0.1%) to a seasonally adjusted annual rate of $351.7 billion. The latest Census estimate shows gains in the single and multifamily components of private residential construction spending offset by a decline in home improvements.
Single-family spending increased 0.7% and multifamily spending increased 1.4% over the revised July estimates. Home improvements spending fell 2.0% over the revised July estimate.
On a 3-month moving average basis, from August 2013, single-family construction spending increased 9.1% and multifamily construction spending increased 39.2%. Over the same period private construction spending on home improvements decreased 8.0%.
It is likely that private construction spending on home improvements lagged in 2014 due to a decline in existing home sales and the expiration of tax credits for energy efficient remodeling. The monthly and annual increases in single and multifamily construction spending align with recent improvements in builder sentiment. The August NAHB/Wells Fargo Housing Index jumped four points in to 59. An index reading above 50 indicates more builders see the market improving than see it getting worse.