Residential construction spending shifts to improvements

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residential construction completion

The Census Bureau’s report on construction spending shows that the value of multifamily residential construction put in place in September was up 0.3 percent month-over-month. Spending on single-family fell, with spending on improvements rising by a nearly equal amount.

Single-family decline continues

The reported value of total private residential construction put in place in September 2022 was $918.0 billion on a seasonally adjusted, annualized basis. This figure, which includes spending on both new construction and on improvements, was reported to be down $16 billion from August’s revised figure. However, August’s spending was revised upward by $5.1 billion in this month’s report. Residential construction spending in September was up 12.8 percent year-over-year.

The value of new private construction of multifamily residential buildings put in place in September was reported to be $101.6 billion on a seasonally adjusted, annualized basis. This was reported to be up $267 million from the revised (+$39 million) level for August. The value of multifamily residential construction put in place in September 2022 was 1.9 percent higher than the level of September 2021.

By comparison, the Census Bureau’s New Residential Construction report said that the number of unit completions in September in buildings with 5 or more units was up 17 percent for the month and up 33 percent year-over-year.

State and local governments were reported to have put $8.2 billion in residential construction in place in September on a seasonally adjusted annualized basis.

The value of new single-family residential construction put in place in September was $423.7 billion on a seasonally adjusted, annualized basis. This was down $11.4 billion (2.6 percent) from the revised (-$0.8 billion) level for August and was down 2.8 percent from the level of September 2021.

The value of improvements to residential buildings put in place in September was reported to be $392.7 billion on a seasonally adjusted, annualized basis. This was up 40.8 percent from the year-earlier level and was up 2.9 percent from the revised (+$5.9 billion) level for August. The Census Bureau does not separate out improvements for single-family and multifamily residential buildings.

Charting the data

The following chart shows the value of residential construction put in place each month since January 2001.

multifamily and single-family construction spending

The chart shows that the value of multifamily residential construction put in place has been holding steady near the $100 billion level for nearly 2 years. However, single-family residential construction spending is in a clear decline from its high reached 5 months ago. It is now down 12 percent from that high.

Spending on residential improvements continued to climb this month. Improvements now account for 43 percent of total residential construction spending.

The report from the Census Bureau also includes information on spending on other types of construction projects. The full report can be found here.