NAHB analysis of Census Construction Spending data shows that total private residential construction spending grew 1.2% in March to a seasonally adjusted annual rate (SAAR) of $503.4 billion. This is 7.5% higher than a year ago and represents a new post-recession high.
The monthly gains are largely attributed to the strong growth of private construction spending on both multifamily and home improvements. Multifamily construction spending continued its record breaking pace to a SAAR of $66.1 billion. It increased by 2.0% over the revised February estimates and was 7.4% higher since a year ago. Spending on home improvements has now increased for six straight months, reaching the SAAR of $178.9 billion in March. On a year-over-year basis, home improvement spending rose by 11.8%. Single-family construction spending increased slightly by 0.3%, continuing its steady growth since October 2016.
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 since 2010 and a more modest growth in single-family construction spending.
Private nonresidential construction spending slipped 1.3% on a monthly basis, however, it was 6.4% higher than a year ago. The largest contribution to this year-over-year nonresidential spending gain was made by the class of communication (19.1%), followed by office (17.7% increase), and educational (15.3% increase).