Residential construction spending slips in March
March's residential construction spending declined by 3.5% on a seasonally adjusted basis from February, but was virtually flat for new single-family properties, according to the U.S. Census Bureau.
There was $536.8 billion spent on a seasonally adjusted basis for residential construction in the private sector during March, down from a revised $556.5 billion in February but up 5.3% from $509.9 billion in March 2017.
The month-to-month decline in seasonally adjusted new single-family construction spending was a mere 0.4%, $283.5 billion in March versus $284.8 billion for February. It rose 9.7% compared with March 2017's $258.4 billion.
On an unadjusted basis, March's residential construction spending was $42.8 billion, up from $37.2 billion in February and $40.9 billion in March. New single-family construction totaled $22.2 billion, up from $18.9 billion in February and $20.1 billion in March.
Year-to-date, new single family construction spending rose 10.5% to $60.7 billion, compared with $54.9 billion for the same period in 2017. All residential construction spending totaled $116.6 billion year-to-date, up 7.8% from $108.1 billion last year.
While residential housing starts increased in March, that was driven by a 14.4% increase (on an annualized basis) in multifamily starts, according to data the Census Bureau released with the Department of Housing and Urban Development on April 17. Single family starts fell by 3.7%. However, permits – a proxy for future construction for all types of homes – rose 2.5% to a 1.35 million annualized rate.
Meanwhile consumer spending on remodeling projects continued its rise.
Remodeling spending rose to $318 billion in the first quarter, from $314.6 billion in the fourth quarter and $297.7 billion, according to the Joint Center for Housing Studies of Harvard University's Leading Indicator of Remodeling Activity report released on April 17.
"Strengthening employment conditions and rising home values are encouraging homeowners to make greater investments in their homes," says Chris Herbert, managing director of the Joint Center for Housing Studies in a press release. "Upward trends in retail sales of building materials and the growing number of remodeling permits indicate that homeowners are doing more – and larger – improvement projects."