Multifamily Spending Continues Record Breaking Pace

March multifamily residential construction spending had significant gains from one year ago. NAHB analysis of Census Construction Spending data shows that total private residential construction spending for March increased to a seasonally adjusted annual rate of $435.5 billion, up by 1.6% over February’s revised estimate. Meanwhile nonresidential construction spending declined 0.4% after two consecutive monthly increases.

Within private residential construction spending, single-family spending stood at $236.3 billion, virtually unchanged over last February estimate but up by 13.4% annually. Multifamily spending continued its strong growth and reached $64.4 billion, exceeding the February high of $61.0 billion. This was a 34.6% increase from the March 2015 estimate. Private construction spending on home improvements rose slightly to a seasonally adjusted annual rate of $134.8 billion, up by 2.4% over revised February estimates. Compared to 2015 March estimates, spending on home improvements decreased 8.9%. (Please see this analysis of recent data revisions for this series).

The NAHB construction spending index, which is shown in the graph below (the base is January 2000), highlights the record breaking gains by multifamily construction and steady growth in single-family construction spending. NAHB anticipates accelerating growth for single-family spending in 2016.

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The pace of total nonresidential construction spending retreated from a huge increase in the January estimate. It slipped down 0.4% on a monthly basis, but was 8.3% higher than the March 2015 estimate. The largest contribution to this year-over-year nonresidential spending gain was made by the class of lodging (31% increase), followed by office (22% increase) and highway and street (21% increase).

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