Construction Spending Dips In June As Single-Family Home Building Fell

U.S. construction spending fell 1.1% in June from a month earlier, led in part by a decline in the construction of single-family homes.

In its monthly report, the U.S. Census Bureau estimated the seasonally adjusted annual rate of construction at 1.76 trillion, 1.1% below the revised May estimate of 1.78 trillion.

Year over year, however, June’s estimate is 8.3% above the estimate for June 2021, the report said. In addition, during the first six months of this year, construction spending amounted to $848.2 billion, 10.7% below the $766 billion for the same period last year.

Spending on private construction was at a seasonally adjusted annual rate of $1,42 trillion, down 1.3% from the revised estimate of $1.43 trillion a month earlier. Residential construction was at a seasonally adjusted annual rate of $923.7 billion in June, down 1.6% from the revised May estimate of $939.2 billion. 

That included a 3.1% decrease in single-family home construction in June from May. According to the report, an estimated 467,527 single-family homes were constructed in June, down from 482,458 in May. Year over year, construction of single-family homes in June was up 8.4%.

Construction of multifamily units, however, was up slightly from a month earlier. According to the report, an estimated 100,579 multifamily units were constructed in June, up 0.4% from 100,165 in May. June’s total was down 0.1% from a year earlier.

The drop in residential construction spending came as no surprise. Builder confidence continued to slide for the sixth consecutive month in June, as rising inflation and higher mortgage rates curtailed prospective homebuyers, the National Association of Home Builders said.

Nonresidential construction was at a seasonally adjusted annual rate of $492.7 billion in June, 0.5% below the revised May estimate of $495.3 billion.

In June, the estimated seasonally adjusted annual rate of public construction spending was $345.9 billion, 0.5% below the revised May estimate of $347.5 billion. Educational construction was at a seasonally adjusted annual rate of $77.5 billion, 0.7% below the revised May estimate of $78.1 billion. Highway construction was at a seasonally adjusted annual rate of $97.4 billion, 2.7% below the revised May estimate of $100.1 billion.