NAHB analysis of Census Construction Spending data shows that total private residential construction spending stood at a seasonally adjusted annual rate (SAAR) of $637.1 billion in October. It was up 2.9% over the upwardly revised September estimates. Total private residential construction spending was 14.5% higher than a year ago.
The monthly gain is largely attributed to the steady growth of spending on single family and multifamily construction. It is consistent with the best pace of single family starts in October and surging builder confidence. Spending on single-family construction rose 5.6% to a $324.0 billion annual pace, supported by the increasing buyer traffic amid the record low mortgage rates. Multifamily construction spending inched up 1.2% to a $90.2 billion annual pace, reaching a record high in October. Private residential improvements, which include spending on remodeling, major replacements, and additions to owner-occupied housing units, stayed flat at a $223.0 billion annual pace in November.
The NAHB construction spending index, which is shown in the graph below (the base is January 2000), illustrates the solid growth in single-family construction and home improvement from the second half of 2019 to February 2020, before the COVID-19 hit the U.S. economy, and the quick rebounds since July 2020. New multifamily construction spending has picked up the pace after a slowdown from the second half of 2019.
Private nonresidential construction spending declined 8.2% in October on an annual basis to a rate of $456.6 billion. The year-over-year nonresidential spending decrease was mainly due to lower spending on the class of power ($9.3 billion less), followed by manufacturing ($9.3 billion less), and lodging ($7.6 billion less).