Private residential construction spending was up 1.3% in October, rebounding from a 1.4% decline in September 2025. This modest gain was primarily driven by increased spending on home improvements. Despite this increase, total spending remained 1.3% lower than a year ago, as the housing sector continues to navigate the economic uncertainty stemming from ongoing tariff concerns and elevated mortgage rates.
According to the latest U.S. Census construction spending data, single-family construction spending declined 1.3% in October, consistent with the soft builder confidence reflected in the NAHB/Wells Fargo Housing Market Index (HMI). Compared to a year ago, single-family construction spending decreased by 6.1%. Meanwhile, multifamily construction spending edged down 0.2% in October after four consecutive months of modest gains. Compared to a year earlier, multifamily spending was still down 2.8%. Improvement spending (remodeling) rose 4.5% for the month and was up 4.4% compared to a year ago.
The NAHB construction spending index is shown in the graph below. The index illustrates how spending on single-family construction has slowed since early 2024 under the pressure of elevated interest rates and concerns over building material tariffs. Multifamily construction spending growth has also slowed down after the peak in July 2023, with the index largely plateauing since late 2024. In contrast, improvement spending has been on an upward trend since the beginning of 2025.
Spending on private nonresidential construction was down 2.6% over a year ago. The annual private nonresidential spending decrease was primarily driven by a $23 billion drop in manufacturing construction spending, followed by a $3.8 billion decrease in commercial construction spending.
