Total private residential construction spending increased in December for the second consecutive month to a seasonally adjusted annual rate of $352.6 billion according to Census estimates. The current reading is a 2.6% increase above the revised November figures and 18.3% higher than one year ago.
Single-family spending registered a healthy increase of 3.4% for the month, while the multifamily category saw a more modest increase of 0.5%. The home improvement category saw an increase of nearly 2.0% for the month.
Spending in all categories continued to experience significant improvements from December of last year. On a 3-month moving average basis, single-family construction spending increased by 20.0%, multifamily increased by 34.5%, and remodeling increased by 14.0%.
Although spending continues to improve for all categories, it remains well below their respective peaks. Since market low points, total private residential construction spending is up 54.3%, single-family 99.4%, multifamily 172.5%, and improvement-related spending 29.7%.
The data show significant improvements in residential construction spending for all categories from the prior month and last year. The year-over-year increase in multi-family construction spending was large (34.5%) and is reflective of developers moving to meet an increase in the demand rental units. Rental vacancy is currently at a 12 year low.