Multifamily Construction Spending Continues Strong Growth

NAHB analysis of Census Construction Spending data shows that total private residential construction spending grew 1.6% in October to a seasonally adjusted annual rate of $472.9 billion.

Multifamily construction spending continued its record breaking pace and reached $63.7 billion, up by 2.8% over the revised September estimates. It was 11.4% higher since October 2015. Single-family construction spending also increased by 2.8% monthly, which is the first monthly gain ever since February 2016. However, single-family spending still slipped down by 1.6% over a year ago. Home improvements slightly dipped 0.6% over the upwardly revised September estimates. On a year-over-year basis, spending on home improvements increased by 13.0%.

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 spending has slowed down.

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The pace of private nonresidential construction spending declined 2.1% on a monthly basis, however, was 4.8% higher than a year ago. The largest contribution to this year-over-year nonresidential spending gain was made by the class of office (28.4% increase), followed by lodging (23.1% increase), and educational (18.0% increase).

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