Private residential construction spending declined 0.5% in May, marking the fifth consecutive month of declines.
This decrease was mostly caused by lower spending on single-family development.
Total spending fell 6.7% from a year earlier, as the housing sector grapples with economic uncertainty caused by persistent tariff concerns and rising mortgage rates.
According to the most recent US Census Construction Spending data, single-family construction spending fell by 1.8% in May.
This fall is consistent with the third lowest reading of the NAHB/Wells Fargo Housing Market Index (HMI) since 2012.
Single-family construction spending fell 4.5% over the previous year.
Meanwhile, multifamily building spending remained steady for the month, continuing the decreasing trend that started in mid-2023.
Multifamily spending fell 10.9% from May 2024. Improvement spending (remodeling) rose 0.9% in May but fell 7.8% year on year.
The graph below shows the NAHB construction spending index.
The indicator shows how spending on single-family construction has declined since early 2024 as a result of rising interest rates and concerns about building material tariffs.
Multifamily construction spending growth has likewise declined from its peak in July 2023.
Improvement spending has also been declining since the start of 2025.
Spending on private nonresidential building fell 3.9% from a year ago.
The annual fall in private nonresidential spending was principally caused by a $15 billion loss in commercial construction investment, which was followed by a $9.0 billion drop in manufacturing.
[Read more about this topic on Eyeonhousing.org]