December 2, 2013
Total private residential construction spending decreased slightly from the revised August and newly released September figures to a seasonally adjusted annual rate of $326.9 billion in October 2013 according to Census estimates. The current reading is a 0.6% decrease from the prior month and 17.8% higher than a year ago.
Today’s release included September and October data for construction put in place. The September data release was delayed by the government shutdown. The September reading was a 1.7% increase from August and 10.3% higher than a year ago.
Total private residential construction spending was at a market low point of $228.5 billion in June 2009. Although spending improved for all categories, the figures are well below their respective peaks. Since market low points, total private residential construction spending is up 43.1%: single-family 86.9%, multifamily 163.6% and improvement-related spending 17.1%.
Single-family spending registered a decrease of 0.6% for the month. The the home improvement category saw a decrease of 1.2% for the month. The multifamily category saw a healthy increase of 2.2%.
For October, on a 3-month moving average basis, single and multifamily spending continued to experience improvements over the course of 2013. Single-family spending increased by 13.9% while multifamily increased by 22.3%. Remodeling decreased 2.9% on a 3-month moving average basis.
Spending continues to improve for all categories, but remains well below their respective peaks. The data show a slowdown from the prior month for single-family and improvements that are reflective of the soft patch the housing sector entered in the fall. In spite of this month-over-month slowdown, the data show significant improvements in residential construction spending for all categories from the prior year. In fact, builder confidence remains solid.
October 22, 2013
Total private residential construction spending increased to a seasonally adjusted annual rate of $340.2 billion in August 2013 according to Census estimates. The August data for construction put in place data was released today after a delay of three weeks due to the government shutdown. The current reading is a 1.2% increase from the prior month and 18.7% higher than a year ago. After a tepid July, the pace of growth in construction spending improved in August.
Total private residential construction spending is at its highest level since August 2008. Since market low points, total private residential construction spending is up 48.9%, single-family 88.5%, multifamily 146.6%, and improvement-related spending 30.7%. Spending continues to improve for all categories, but remains well below their respective peaks.
Single-family spending registered an increase of 1.6% for the month, while the multifamily category saw a healthy increase of 3.2%. The home improvement category remained relatively flat with an increase of just 0.2% for the month.
For August, on a 3-month moving average basis, all categories continued to experience significant improvements over the course of 2013. Remodeling related spending is up 8.4% for the year-to-date. Single-family spending has increased by 12.9% and multifamily spending has increased 15.8%.
The data show improvements in construction for all categories. However, the government shutdown had yet to occur and is not reflected in the August data. A revised schedule posted by the Census indicates that September data for construction put in place will also be delayed one month. The September and October data are scheduled for release on the same date – December 2. This release should provide us with a better picture of construction spending moving forward.
September 3, 2013
Total private residential construction spending increased marginally to a seasonally adjusted annual rate of $334.6 billion in July 2013 according to Census estimates. Spending continues to improves, but remains well below the peak pace of $676.4 billion in March 2006. The current reading is 17.2% higher than a year ago.
Single-family spending registered a slight increase of 0.5% for the month, while the home improvement category increased 0.8%. The multifamily category remained nearly unchanged with an increase of 0.1% for the month.
In spite of the tepid month-over-month increases for July, on a 3-month moving average basis, all categories have experienced significant improvements over the course of 2013. Remodeling related spending is up 6.5% for the year-to-date. Single-family spending has increased by 11.6% and multifamily spending has increased 16.0%.
Since market low points, total private residential construction spending is up 46.4%, single-family 84.5%, multifamily 143.8%, and improvement-related spending 29%.
The data shows improvements in construction categories for all categories but at a slower month-over-month rate than experienced in recently. The slow-down comes ahead of the effects of an increase in mortgage interest rates that has slowed both new home and pending home sales.
August 1, 2013
After recent positive data revisions, seasonally adjusted improvement spending has shown growth during the spring of 2013. The current pace of improvement spending is the highest since 2007. This improved picture of the remodeling market is consistent with NAHB surveys of remodelers, suggesting improving market conditions during the second quarter.
According to the current Census construction spending report, total private residential construction spending was effectively unchanged at a seasonally adjusted annual rate of $332.1 billion in June 2013. The May rate of $332.2 billion was the fastest pace since September 2008. The current reading is 18.1% higher than a year ago.
Single-family spending registered a slight decline (0.8%) for the month, while the more volatile multifamily category was down 3.3% in June.
The Census data concerning home improvement spending has changed markedly over the past few months. Post-revisions, on a 3-month moving average basis, the improvement category experienced weakness during the second half of 2012. In contrast, over the course of 2013 remodeling related spending is up 16.2%.
This is a significant reversal with respect to initial reporting, which had just the opposite narrative: weakness during 2013 and strength at the end of 2012.
Taken together, the data illustrate the degree to which residential construction activity is growing off cycle lows. Since market low points, total private residential construction spending is up 45.3%, single-family 80.8%, multifamily 136.9%, and improvement-related spending 30.7%.
July 1, 2013
Total private residential construction spending increased to a seasonally adjusted annual rate of $328.6 billion in May 2013, the fastest pace of residential construction since October 2008. The reading is 1.2 percent above the positively revised April estimate and 22 percent higher since a year ago.
All three components of residential construction spending registered gains. New multifamily construction spending showed the largest increases, rising 2.5 percent since April and 51.7 percent since May 2012. It is now at a seasonally adjusted annual rate of 31.8 billion.
Spending on new single-family homes increased to an annual rate of $166.3 billion, the rate unseen since August 2008. On a year-over-year basis, new single-family construction spending increased 33.2 percent.
Finally breaking the decline that started in January 2013, home improvement spending also registered gains. Remodeling spending increased to an annual rate of $124.2 billion, 1.9 percent above the April reading, 7 percent above the year ago, but still below the spending rate registered during the first quarter of 2012.
June 3, 2013
Total private residential construction spending decreased a negligible 0.1% on a month-over-month basis during April 2013, with the net decline driven by a further decrease in improvement spending. However, total housing-related spending is up 18.8% from April 2012 and has increased 35.7% from the cycle low point in 2009.
Spending on new single-family housing has now increased for 22 of the last 23 months, increasing 1.4% over March. On a year-over-year basis new single-family expenditures have grown 38.6% and are up 81.9% from the cycle low pace set in mid-2009.
New multifamily construction spending registered a 3.4% gain in April and has increased 48.6% measured year-over-year. Multifamily construction is up 123% from the cycle low recorded in mid-2010.
While single-family and multifamily construction continue to improve, home improvement spending has been and remains a source of weakness for the residential construction sector. Remodeling-related expenditures have declined significantly over the course of 2013. Improvement spending was down 3.3% in April and is down 7% from April 2012. Rising existing home sales point to increases later in the year.
May 2, 2013
Total private residential construction spending increased 0.4% on a month-to-month basis during March 2013. After data revisions, first quarter nominal spending levels came in 2.3% lower than the final three months of 2012. With that said, private construction spending has bounced back by 33% since its cyclical low from nearly two years ago and has advanced more than 18% compared to March 2012.
Spending on new single-family housing notched its 21st month-to-month gain over the last 22 months, increasing 1.6% versus February, which itself was revised higher from 4.6% to 5.4% growth. On a year-over-year basis the new single-family category has expanded 38% and has managed to rise 78% above the cyclical low observed back in mid-2009. With the current NAHB forecast projecting growth of 26% and 28% for single family housing starts in 2013 and 2014, respectively, we expect spending activity to continue rising over the next two years.
New multifamily construction spending registered a modest gain of 0.3% in March, but the initial estimate of a 2.2% drop for February was revised to a smaller decline of 1.4%. Despite these two lackluster months, the first-quarter average was a 12% improvement from the fourth quarter of 2012 and the nominal dollar value of spending has skyrocketed 111% in less than two years. The forecast calls for a modest decline in multifamily starts during the second quarter of 2013 after what was likely an unsustainably large increase during the first quarter (primarily in March). Multifamily starts are expected to increase in every quarter thereafter, albeit at a slower and steadier pace, which in turn will yield further growth in nominal spending levels.
While the other two categories improved, home improvement spending was a source of weakness for the residential construction sector. Remodeling expenditures have declined in each of the last five months, with the March 2013 estimate coming in at a drop of 1.4% compared to February. The 3-month moving average, which tends to smooth out the month-to-month volatility in reported home improvement spending, points to a noticeable dip in remodeling activity after a healthy surge between spring and fall of last year. The most recent forecast calls for remodeling activity to rise modestly over the remainder of the outlook period. However, this downward trend in spending data plus the latest edition of NAHB’s Remodeling Market Index point to some risk to projected home improvement activity over the near term.
April 1, 2013
After three consecutive months of slight declines, private residential construction spending increased 2.2% on a month-to-month basis in February. Despite the sluggish readings from the prior 3 months, nominal spending on residential construction activity remained more than 20% above its year-ago level and roughly 36% higher than the cyclical low in mid-2011.
The new single-family home category continued to show strength in February, gaining 4.3% versus January. Compared to February 2012, spending on new single-family homes has risen 34%, but perhaps more importantly, the level of nominal construction spending has surged more than 73% since bottoming out in mid-2009. Spending activity will likely expand further over the next two years as the current NAHB forecast calls for single-family housing starts to increase 23% and 29%, respectively, this year and next.
The multifamily sector took a step back in February, with spending on new multifamily projects slipping 2.2% from January. In fact, this marks the first outright month-to-month decline for this category since September 2011. Still, the overall trend remains decidedly positive for new multifamily construction activity as the level of spending is 52% ahead of the pace in February 2012 and has more than doubled the August 2010 low point. After a likely modest retrenchment in the first quarter of 2013, the baseline forecast calls for consistent gains in multifamily starts through the end of 2014.
Home improvement spending improved slightly in February, gaining 0.5% versus the previous month and is 1.1% above the level from last year. Although this construction spending category is the most volatile and likely to be revised, the 3-month moving average suggests spending on remodeling activity has cooled over the past several months. Nonetheless, with existing home sales expected to register steady growth going forward, home improvement activity should see a similar pattern as sellers spruce up their homes for sale and/or buyers decide to make changes after they move into the home.
March 4, 2013
Private residential construction spending was relatively unchanged for the first month of 2013 due to declines in the volatile remodeling spending category. Nonetheless, total residential construction spending remains near post-2009 highs and has experienced growth in 15 of the last 17 months according to data from the Census Bureau.
Spending on new single-family homes continued to expand, rising 3.6% over December’s pace. On a year-over-year basis, the nominal value of spending on new single-family homes has risen over 30%. Since bottoming out around the midway point of 2009, construction spending has surged 65%. The current NAHB forecast calls for single-family housing starts to grow in 2013, with a slower pace of expansion anticipated during the first quarter of this year.
Construction spending on new multifamily projects also increased in January, growing 1.7% from December 2012. Gains in spending have occurred in each of the last 16 months. On a year-over-year basis, the level of apartment spending has increased almost 55% and has - as of January – more than doubled from the cyclical low set in August 2010.
Offsetting the gains in single-family and multifamily construction, January saw a 4% drop in improvement spending that resulted flat headline growth for total private residential category. The 3-month moving average of remodeling spending was down almost 2% but remains near post-2007 highs.
February 1, 2013
Private residential construction spending jumped 2.2% on a month-to-month basis during December 2012. The initial estimate of a 0.4% gain for November was moved up slightly to a 0.6% increase, but the October number was pushed appreciably higher from 1.3% to 3.2%. Spending has registered nine uninterrupted months of growth, as well as 16 of the last 17 months showing expansion. The nominal dollar level of spending has now reached its highest point since late 2008 and the average from the last three months is 32% above the cyclical low.
Spending on new single-family homes decelerated to its slowest pace of month-to-month growth since the first quarter of 2012, rising 0.8% versus November. On a year-over-year basis, the nominal value of spending on new homes has risen over 28%. In addition, since bottoming out around the midway point of 2009, construction spending has surged 59%. The current NAHB forecast calls for single-family housing starts to expand for the entirety of the outlook period, but a slower pace of growth is anticipated during the first quarter of this year. They are expected to re-accelerate over the remainder of 2013, and thus we anticipate a similar pattern will likely occur for construction spending.
Construction spending on new multifamily projects jumped 6.2% during December 2012. Moreover, the initial estimate for November was revised higher from 0.5% to 1.8%, indicating spending activity finished the year strong. Of the three main categories of residential construction, multifamily has experienced the strongest rebound from its cyclical trough. Gains in spending have occurred in each of the last 15 months, with the latest month available representing the second largest percentage increase over this time period. On a year-over-year basis, the level of spending has skyrocketed more than 57% and has gained 97% from the bottom in August 2010.
Remodeling activity improved in December as spending climbed 2.9% from the prior month. Preliminary estimates for October and November were also revised higher, significantly higher in the case of October with a 1.9% decline turning into a 2.3% gain. The 3-month moving average points to a solid upward trend in home improvement spending and closed out 2012 at its highest nominal dollar value since September 2007. NAHB’s Remodeling Market Index (RMI) has offered a similar judgment on recent home improvement activity as the current and future market indicators have achieved their best readings since the first quarter of 2004.