Private Residential Spending Is On the Rise

NAHB analysis of Census Construction Spending data shows that total private residential construction spending rose 1% in November to a seasonally adjusted annual rate of $530.8 billion. It was the highest level since February 2007. Total private residential construction spending was 7.9% higher than a year ago.

The monthly gains are largely attributed to the strong growth of spending on single-family. Single-family construction spending rose to a $270.1 billion annual pace in November, up by 1.9%. It was the highest monthly annual rate since November 2007. This is in line with the strong readings of single-family housing starts and solid builder confidence. Remodeling spending increased by 0.7% in November. However, multifamily construction spending slipped 1.3% after the September and October declines, and was 1.7% lower since a year ago.

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 from 2010 to April 2017, and a steady growth in single-family construction and home improvement spending.

Private nonresidential construction spending increased 0.9% to a seasonally adjusted annual rate of $433 billion. However, it was 3.1% lower than a year ago. The largest contribution to this month-over-month nonresidential spending increase was made by the class of office ($3.1 billion), followed by commercial ($1.2 billion), and transportation ($0.6 billion).



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