NAHB analysis of Census Construction Spending data shows that total private residential construction spending stood at a seasonally adjusted annual rate of $536.8 billion, down 3.6% in March. This is the biggest monthly decline since April 2009. It follows four months of strong consecutive gains, including the positively revised February growth of 1.2%. On an annual basis, total private residential construction spending remains in the positive territory, 5.3% higher than a year ago.

This sharp monthly decline is largely attributed to the significant drop in home improvement spending, a volatile spending component that is often subject to substantial revisions. Remodeling spending fell 8.0% in March, after advancing 1.5% in February. Nevertheless, home improvement spending remains 3.7% higher than a year ago. Multifamily construction spending decreased 2.7% in March, the third monthly decline in row. Single-family construction spending experienced a modest dip of 0.4%, falling to a $283.5 billion annual pace in March. It was up 9.5% compared to March 2017.

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 an ongoing steady growth in single-family construction.

Spending on private nonresidential construction slipped 0.4% in March to a seasonally adjusted annual rate of $450.7 billion. This month-over-month nonresidential spending decrease was mainly due to declines in the class of Commercial ($1.9 billion), followed by Health Care ($1.1 billion), and manufacturing ($0.7 billion). Private nonresidential construction spending was 2.2% higher than a year ago.