Residential Construction Spending Increases

By Stevie Duffin Updated on 9/25/2013

Spending for residential construction increased 1.6% in the first month of this year from December of last year and 5.4% from 2011.  This is based on the data released by the Census Bureau.

This is a seasonally adjusted number and actually reached $260.6 billion which is the biggest level for construction of residential properties since mid-2010. January was also the 6th consecutive month of growth.

Private spending which makes up the majority of residential construction spending, grew 1.8% and 6.7% from a month and year earlier accordingly. New home spending (for single family) increased 5.5% to $113.9 billion from January 2011, while multifamily construction shot up 20% to $16.2 billion. This while public residential construction plummeted 27.7%.

Despite all of these increases, spending is still below levels that were witnessed in the 2006 timeframe. In 2011, residential construction spending was $244.4 billion which was a 16-year low.  With the increase in residential buildings spending and refinance programs such as the HARP 2 refinance sponsored by the Obama Administration, the real estate market is poised for a comeback in early 2013.