Private residential construction spending fell further in July, marking its fourth consecutive monthly decline. According to the latest construction spending data from the U.S. Census Bureau, private residential construction spending stood at a seasonally adjusted annual rate (SAAR) of $859.0 billion in July, down 1.3% from the revised June estimate and down 7.3% from a year earlier.
The July decrease was driven entirely by the single-family construction, the only residential category to post a monthly decrease. Single-family construction spending fell 3.2%, consistent with the continued weakness in builder sentiment reflected in the NAHB/Wells Fargo Housing Market Index (HMI). On a yearly basis, single-family spending was down 6.5%.
Multifamily construction spending edged up by 0.2% from June but remained 0.9% below the previous year. Spending on improvement (remodeling) also saw a modest increase of 0.3% over the month but declined 10.2% over the year. The remodeling estimates, which had significant revisions in the June report, underwent further revisions in July. May’s monthly change was revised from a 0.4% decline to a 1.1% decline, while June’s initially reported a 0.1% increase was revised to a 0.8% decrease.
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 June 2023, with the index largely plateauing since late 2024. In contrast, improvement spending has been on an upward trend since 2023, supported in part by the aging housing stock and sustained demand for renovation. However, the latest revision indicates that a slowdown could be happening in 2026.
Private nonresidential construction moved in the opposite direction, recording its fourth consecutive monthly increase. July’s spending rose 0.4% to a SAAR of $755.2 billion, although it remained 3.3% below the previous year. Data center construction, a subcategory within office construction, remained strong with spending increasing 6.2% month-over-month and 57.2% year-over-year. The share of data centers as a percentage of spending on office construction has now surpassed 60% in July 2026.
