In July, private residential construction spending experienced its fourth consecutive monthly decline.
Private residential construction spending in July was $859.0 billion, a seasonally adjusted annual rate (SAAR) that was 1.3% lower than the revised June estimate and 7.3% lower than the previous year, according to the most recent construction spending data from the U.S.
Census Bureau.
The single-family construction category was the sole residential category to experience a monthly decrease in July, which was entirely responsible for the decline.
The NAHB/Wells Fargo Housing Market Index (HMI) indicates that builder sentiment remains weak, as evidenced by a 3.2% decline in single-family construction spending.
Single-family spending experienced a 6.5% decline on an annual basis.
The spending on multifamily construction increased by 0.2% from June, but it remained 0.9% below the previous year.
Additionally, there was a slight increase of 0.3% in spending on enhancement (remodeling) during the month, but it experienced a 10.2% decline over the course of the year.
The remodeling estimates, which were significantly revised in the June report, were subject to additional revisions in July.
June’s initial report of a 0.1% increase was revised to a 0.8% decrease, while May’s monthly change was revised from a 0.4% decline to a 1.1% decline.
The graph below illustrates the NAHB construction expenditure index.
The index illustrates the slowdown in single-family construction spending that has occurred since early 2024, which is a result of the ongoing uncertainty surrounding building material tariffs and elevated interest rates.
The index has largely plateaued since late 2024, and multifamily construction spending growth has also slowed down since the peak in June 2023.
In contrast, the aging housing stock and the persistent demand for renovations have contributed to an upward trend in improvement spending since 2023.
Nevertheless, the most recent revision suggests that a decline may occur in 2026.
Private nonresidential construction experienced its fourth consecutive monthly increase, indicating a contrary trend.
Although the spending in July increased by 0.4% to a SAAR of $755.2 billion, it remained 3.3% lower than the previous year.
Data center construction, a subcategory of office construction, maintained its momentum, with a 6.2% month-over-month increase and a 57.2% year-over-year increase in spending.
In July 2026, the percentage of office construction expenditures that are allocated to data centers has surpassed 60%.
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