December Private Residential Construction Spending Rises 1.5%

According to the most recent US Census building Spending data, private residential building spending rose by 1.5% in December 2024.

It was the third monthly gain in a row, dating back to September 2024. Year over year, the December report indicated a 6% gain.

The monthly increase in overall private construction spending was primarily driven by increased spending on single-family homes and residential upgrades.

Single-family building spending increased by 1% this month.

This shows the continuance of expansion following a five-month dip from April to August, which is consistent with the Housing Market Index’s stable builder optimism.

However, single-family building remained 0.8% lower than the previous year.

In December, improvement spending increased by 2.6%, making it 21.9% greater than the same period last year.

In contrast, multifamily construction spending fell 0.3% in December after increasing by 8.4% in October and 0.8% in November.

Multifamily construction spending fell 10.5% from a year ago.

The graph below depicts the NAHB’s construction spending index.

The index shows how single-family construction investment has declined since early 2024 as interest rates have risen.

Multifamily construction spending growth has also decreased after July 2023.

Meanwhile, spending on improvements has accelerated since late 2023.

Private nonresidential building spending increased by 2.3% over the previous year.

The annual rise in private nonresidential spending was primarily driven by increased spending in the manufacturing category ($23.6 billion), followed by the electricity category ($4.5 billion).

[Read more about this story on Eyeonhousing.org]