Construction spending fell in April as U.S. companies and the government scaled back projects across the country amid high interest rates. Outlays for single-family home building, however, climbed to the highest level since August 2022. The Commerce Department’s Census Bureau on Monday said construction spending fell 0.1% after slipping 0.2% in March.
Total residential construction, at $902 million, was about the same over the last five months. New private single-family and multifamily construction followed along the same lines.
Construction spending during April 2024 was estimated at a seasonally adjusted annual rate of $2,099 billion, 0.1% below the revised March estimate of $2,101.5 billion. The April figure is 10% above the April 2023 estimate of $1,907.8 billion. During the first four months of this year, construction spending amounted to $635.5 billion, 10.9% above the $573 billion for the same period in 2023.
Liz Ann Sonders, chief investment strategist for Charles Schwab, noted on X (formerly known as Twitter) that home improvement spending actually rose slightly in April, despite a larger downtrend in home improvement projects.
Sonders had previously pointed out that residential construction spending fell significantly from 2022 to 2023 while non-residential spending grew. Those trends have begun to reverse in recent months, she said, with office construction spending actually still elevated, but now slowing significantly.
An uptick in residential construction spending—specifically single-family homes—could bode well for the industry, which has been facing a crisis of low inventory for years. But these numbers don’t necessarily foreshadow an influx of more homes—rather, the cost of building homes could be rising, and/or builders could be focused on more expensive homes (something bolstered by other recent data).
Spending on private construction was at a seasonally adjusted annual rate of $1,611.9 billion, 0.1% below the revised March estimate of $1,613.3 billion. Residential construction was at a seasonally adjusted annual rate of $890.4 billion in April, 0.1% above the revised March estimate of $889.5 billion. Nonresidential construction was at a seasonally adjusted annual rate of $721.5 billion in April, 0.3% below the revised March estimate of $723.8 billion.
