Following a series of declines in the second quarter of 2026, private residential construction spending increased in August 2026.
Private residential construction expenditure in August reached a seasonally adjusted annual rate (SAAR) of $882.3 billion, a 1.1% increase from July but a 4.8% decrease from the previous year, according to the most recent construction spending data from the U.S. Census Bureau.
The most significant monthly increase was 2.5% in improvement (remodeling) spending, which was observed across all residential sectors.
Nevertheless, remodeling expenditures experienced a 7.4% decline in the course of the year.
In August, both single-family and multifamily construction expenditures increased by 0.2%; however, they are down 3.5% and 0.6% from the previous year, respectively.
The NAHB/Wells Fargo Housing Market Index (HMI) indicates that builder sentiment is weak, which is consistent with the decrease in single-family construction spending.
This trend is occurring in the context of increasing interest rates and costs.
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 expenditure 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 data is in agreement with the implementation of a 2026 soft patch for remodeling.
The trend of private nonresidential construction spending remained upward.
Although the spending in August increased by 1.0% to a SAAR of $773.0 billion, it remained 1.0% lower than the previous year.
The construction of data centers, a subcategory of office construction, remained robust, with spending increasing by 7.5% month-over-month and 73.2% year-over-year.
This growth was attributed to the expansion of artificial intelligence infrastructure.
In July 2026, the percentage of data centers in the total private nonresidential construction budget surpassed 10%.
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