The National Association of Home Builders (NAHB), with information from the U.S. Census Bureau, reports that private residential construction spending came in at $507.2 billion in June—a slight month-over-month decline.
The drop, however, is more dramatic when compared to 2018, as spending fell 8.1% from June 2018.
Declines, according to the NAHB, can be attributed to the slowdown of single-family construction and improvement spending. Spending on single-family construction fell 0.7% in June to an adjusted rate of $263.6 billion, which followed a 1% drop in May.
Spending on home improvement dipped 0.5% for the month, which is a 0.7% increase from May.
Also seeing a decline in June was the Producer Price Index (PPI), which showed prices for materials used in residential construction fell 1.1% in June, breaking a four-consecutive months of increases.
The decrease in the PPI, released by the NAHB, is only the fifth time in the past two years where home prices fell.
Prices for building materials have decreased 1.6% year-over-year, and June 2019’s decline is stark contrast from June 2017 to June 2018 when prices grew 8.8%.
Softwood lumber prices decreased by 1.7% in June, which is the third-consecutive month of declines. Prices for softwood lumber remain at their lowest levels since February 2017.
Also seeing declines in June were prices for lumber and plywood, which fell 2.3%. Prices paid for softwood lumber and lumber, and plywood have decreased 23.1% and 17.6%, respectively, year-over-year.
A report by the NAHB in June stated that tariffs on $10 billion worth of building materials, along with regulatory costs, the shortage of construction workers, and concerns over housing finance have impact housing affordability.
According to the report, regulations account for 25% of the price of a single-family home, and 30% of the cost of a multi-family development.
“Removing regulatory barriers that contribute to the increased costs of housing will pave the way to homeownership,” said NAHB Chairman Greg Ugalde, a builder and developer from Torrington, Connecticut. “Home builders and the residential construction community are committed to working with Congress to ensure homeownership is within reach of hard working families.”