NAHB: Private Residential Construction Spending Falls in July

Private residential construction spending declined by 0.4% in July, according to Census Construction Spending figures.

Nonetheless, spending remained 7.7% greater than a year ago.

The monthly decrease in overall private construction spending in July was primarily attributable to lower spending on single-family development.

Spending on single-family construction fell by 1.9% in July, following a 1.1% decline in June. This is the fourth straight monthly drop.

High mortgage interest rates have cooled the housing industry, reducing home builder confidence and new home starts.

Despite these hurdles, single-family building investment increased by 4% over the previous year.

Multifamily building spending was steady in July after falling 0.6% in June.

Year over year, investment on multifamily building fell 6.7% as an increased number of apartments under construction were completed.

Private residential improvement spending rose 1.2% in July, and was 18.3% higher than a year ago.

The graph below depicts the NAHB construction spending index (with January 2000 as the base). The index shows how spending on single-family building has decreased since early 2024 due to high mortgage rates.

Multifamily building spending growth decreased after peaking in July 2023, whereas improvement spending has accelerated since late 2023.

Spending on private nonresidential building increased 4.5% over the previous year.

The annual rise in private nonresidential spending was primarily attributable to increasing spending in the manufacturing category ($39.7 billion), followed by power ($1 billion).

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