Private Residential Construction Spending Declined for Eighth Consecutive Month in January

A closer look at the US Census Bureau’s Construction Spending report released on Wednesday (3-1-23), with a focus on private residential spending and additional analysis provided by the National Association of Home Builders (NAHB), reveals that spending on private residential construction declined 0.6% in January. Single-family home construction declined 1.7%. This marks eight consecutive months of declines. Compared to a year ago, overall spending is down 3.9%.

Lower spending on single-family construction, which has been steadily declining since June 2022, is the cause for the January decline. Year-over-year, spending on single-family construction is 18.4% lower. This is consistent with the retreat in single-family home building, as increased interest rates have cooled the housing market since 2022.

Multifamily construction spending continues to increase, rising 0.4% in January after expanding 1.9% in December 2022. Strong demand for rental apartments has led to a year-over-year increase in multifamily construction spending of 20.6%.

The NAHB notes that private residential improvement spending edged 0.3% higher in January and was 9.0% higher than in a year ago. The remodeling market continues to outperform the rest of the residential construction sector.