Home Improvements Drive Residential Construction Spending

Home improvement spending was the sole contributor to the rise in private residential construction spending during April, with single family construction spending down 1 percent to $104.7 billion and multifamily construction spending down 0.1 percent to $12.8 billion. Courtesy of Census Bureau

A marked increase on home improvement expenditure provided a notable rise in private residential construction spending in March, but spending on single-family and multifamily housing construction continued to decline.

Construction Spending report from the Bureau of Census indicated a 3.1 percent increase in private residential construction spending to $232.1 billion from a downwardly revised $225.07 billion March (March private residential construction spending was previously reported as $229.1 billion).

Both the single family and multifamily construction spending have been declining steadily since the beginning of the year, falling 3.2 percent and 3.5 percent, respectively, since January.

The gain in home improvement spending was more the result of a significant downward revision to the previous month, rather than a healthy improvement in spending. Home improvement spending was up 7.6 percent to $114.6 billion.

But over half of the gain (4.2 percent) was due to a downward revision to the March number (March home improvement spending was revised down to $106.5 billion from $110.7 billion last month). Home improvement spending is typically volatile and subject to regular revisions. Thus, further revisions to the April reading on home improvement spending are likely.

Total private construction spending was up 1.7 percent to $483 billion. The increase in private residential construction spending supported by a 0.5 percent increase in private non-residential construction spending to $250.8 billion.

- Courtesy of NAHB