Private residential construction spending declined 0.8% in January 2026, following two months of gains. This decline was driven by lower spending across single-family, multifamily construction, and home improvement. Despite the monthly decline, total residential construction spending remained 2.3% higher than a year ago.
According to the latest construction spending data from the U.S. Census, single-family construction spending edged down by 0.2% in January, consistent with the softer builder confidence reflected in the NAHB/Wells Fargo Housing Market Index (HMI). Compared to a year ago, single-family construction spending was down 5.8%. Meanwhile, multifamily construction spending also decreased mildly, falling 0.7% in January. This marks the second monthly decrease following six consecutive months of modest gains. Compared to a year earlier, multifamily spending was 0.4% higher. Improvement spending (remodeling) declined 1.4% for the month but remained a bright spot on a year-over-year basis, rising 12.5%.
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, reflecting the impacts of elevated interest rates and ongoing uncertainty 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, supported in part by the aging housing stock and sustained demand for renovation.
Spending on private nonresidential construction was down 3% over a year ago. The annual private nonresidential spending decrease was primarily driven by a $35 billion drop in manufacturing construction spending, followed by a $0.8 billion decrease in commercial construction spending.
