Residential Construction Spending Ends 2016 on High Note

NAHB analysis of Census Construction Spending data shows that total private residential construction spending grew 0.5% in December 2016 to a seasonally adjusted annual rate (SAAR) of $466.9 billion. After slowing in August and September the SAAR of spending on residential construction finishes 2016 with its third consecutive monthly increase.

Multifamily construction spending in December grew by 2.8% to a seasonally-adjusted annual rate of $63.7 billion, more than offsetting November’s decline. The SAAR of spending on new multi-family structures was 11.7% higher than one year prior, while single-family construction grew by only 0.3%. Compared to November, single-family construction spending was 0.5% higher, still slipped down by 0.9% over November 2015. Home improvement spending was the laggard in the month-over-month data, declining by 0.6%; though spending was still 6.6% higher than December 2015.

The NAHB construction spending index (below) shows the growth in residential construction spending since 2000. Beginning in August 2010—when the indices for single-family and multifamily spending converged—monthly growth of multifamily construction spending has doubled that of single-family spending, on average. During the same period, the month-over-month growth of spending on home improvements has averaged one-quarter that of spending on new multifamily construction.

The value of all private residential construction put in place reached $456.2 billion (not seasonally adjusted) in 2016, 5.2% higher than the total for 2015 ($433.7 billion). Similarly, spending on nonresidential structures grew to $420.1 in 2016, 7.8% higher than one year prior. Construction of office, lodging, and amusement and recreation structures fueled the annual increase, growing by 29.5%, 26.4%, and 22.4%, respectively.



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2 replies

  1. Thanks for this blog and for sharing this information about residential construction. Graph given has cleared my doubts. The article was very helpful.

  2. Great post! Thanks for this blog and for sharing this information about residential construction.

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