Private Residential Construction Spending Continues to Grow

Analysis of U.S. Census Bureau data by the National Association of Home Builders shows a 1.4% rise (a seasonally adjusted annual pace of $911.7 billion) in private residential construction spending (single-family, multifamily, and home improvements) during December. That marks the third straight month of gains. Annual spending on private residential construction during 2023 was $864.9 billion, which was 5.8% lower than the 2022 annual totals, according to NAHB.

The monthly increase in total construction spending is attributed to more single-family construction and home improvements. Spending on single-family construction rose 1.6% in December. This is the eighth consecutive monthly increase since April 2023. It is aligned with the strong reading of 1.46 million single-family starts in December, as the lack of existing home inventory is boosting new construction. Compared to a year ago, spending on single-family construction is 9.9% higher. Private residential improvement spending rose 1.7% in December and is 1.4% higher compared to a year ago. Multifamily construction spending inched up 0.3% in December after an increase of 0.4% in November, as a large stock of multifamily housing is under construction.

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