US Private Single-Family Construction Spending Increases in January

A closer look at the US Census Bureau’s latest Construction Spending Report (3-1-24), with a focus on private residential construction costs and additional analysis provided by the National Association of Home Builders (NAHB), reveals that construction spending rose 0.2% in January—the second consecutive gain. On a seasonally adjusted annual basis, spending totaled $900.9 billion.

According to the NAHB analysis, the monthly increase in total construction spending is attributable to more single-family construction. In December 2023, spending on single-family construction increased 0.6%. This marks the nineth consecutive monthly increase dating back to April 2023. It is aligned with the strong reading of 1.33 million single-family starts reported in January, as the lack of existing home inventory is boosting new construction. Year-over-year, spending on single-family construction was 12.5% higher.

On the other hand, multifamily construction spending declined 0.4% after an increase of 0.4% in December, as a large stock of multifamily housing is under construction.

Private residential improvements spending also inched lower in January—down 0.1% and 3.7% lower compared to a year ago.

Spending on private nonresidential construction was up 15.2% from a year ago. The annual private nonresidential spending increase was mainly due to higher spending in the manufacturing category ($60.1 billion), followed by the power category ($10.4 billion).