Private Residential Construction Spending Grows for Third Straight Month

NAHB analysis of Census data shows that private residential construction spending rose 1.4% in December, marking three months of gains. It stood at a seasonally adjusted annual pace of $911.7 billion. The 2023 annual spending on private residential construction was $864.9 billion, 5.8% lower than the 2022 annual totals.

The monthly increase in total construction spending is attributed to more single-family construction and home improvements. Spending on single-family construction rose 1.6% in December. This is the eighth consecutive monthly increase since April 2023. It is aligned with the strong reading of 1.46 million single-family starts in December, as the lack of existing home inventory is boosting new construction. Compared to a year ago, spending on single-family construction is 9.9% higher. Private residential improvement spending rose 1.7% in December and is 1.4% higher compared to a year ago.  Multifamily construction spending inched up 0.3% in December after an increase of 0.4% in November, as a large stock of multifamily housing is under construction.

The NAHB construction spending index is shown in the graph below (the base is January 2000).  It illustrates how spending on single-family construction experienced solid growth since May 2023 under the pressure of supply-chain issues and elevated interest rates. Multifamily construction spending growth stayed almost unchanged in the last three months, while improvement spending has slowed since mid-2022.



Spending on private nonresidential construction was up 19.1% over a year ago. The annual private nonresidential spending increase was mainly due to higher spending on the manufacturing category ($80.7 billion), followed by the power category ($13.2 billion).





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One thought on “Private Residential Construction Spending Grows for Third Straight Month

  1. With increasing investment in residential projects, developers and builders can utilize construction loans to capitalize on this momentum, fueling further expansion in the housing market and driving economic growth.

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