Private Residential Construction Spending Stalls in June

NAHB analysis of Census Construction Spending data shows that total private residential construction spending for June registered a seasonally adjusted rate of $445.8 billion, virtually unchanged from the May downwardly revised estimate. Private nonresidential construction spending fell for a third consecutive month in June, down by 1.3%.
Within private residential construction, spending on single-family and multifamily both declined in June. Single-family spending dropped to $239.6 billion in June, down 0.3% over the upwardly revised May estimate. Multifamily spending decreased to $59.7 billion, down by 1.5% since May. On an annual basis, however, single-family spending was 4.8% higher. Multifamily spending also increased by 16.4% since June 2015. Private construction spending on home improvements rose to a seasonally adjusted annual rate of $146.5 billion in June, up by 1.2% since last month.
The NAHB construction spending index, which is shown in the graph below (the base is January 2000), illustrates 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 course of 2016, consistent with the modest rise in single-family starts for the year.
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The pace of private nonresidential construction spending fell 1.3% on a monthly basis, but was 2.5% higher than the June 2015 estimate. The largest contribution to this year-over-year nonresidential spending gain was made by the class of office (19.6% increase), followed by lodging (17.4% increase) and commercial (7.7% increase).

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