Total private residential spending increased over the revised August estimate to a seasonally adjusted annual rate of $349.1 billion. The September month-over-month increase of 0.4% was driven by a solid month-over-month increase in the single-family component of private residential construction. Single-family spending increased 1.1% over the revised August estimates. Multifamily spending decreased 1.0% while home improvements spending fell 0.3% over the revised August estimate.
On a 3-month moving average basis, from September 2013, single-family construction spending increased 9.7% and multifamily construction spending increased 33.8%. Over the same period private construction spending on home improvements decreased 13.8%.
The year-over-year drop in home improvement spending has done little to dampen sentiment. The Remodeling Market Index (RMI) increased for the sixth consecutive quarter to reclaim an all-time high of 57. If history is a guide construction spending on home improvements will improve as new and existing single-family home sales increase. The latest month-over-month increase in single-family construction spending is a promising sign.