The news was not good in the U.S. Census Bureau’s Department of Commerce’s June 2016 construction spending report, released Monday.
While residential construction spending stayed flat from May to June, the overall numbers were not pretty: a third straight month of declines, this time by 0.6 percent, after experiencing declines of 0.1 percent in May and 2.9 percent in June.
In short, April through June was a tough three-month period for construction spending after experiencing solid gains during the winter.
The seasonally adjusted rate for total private residential construction for June was $445.8 billion, which was virtually unchanged from May’s downwardly revised estimate, according to the National Association of Home Builders (NAHB).
Spending on both single-family and multifamily construction fell off in June, according to NAHB. Single-family spending experienced a decline of 0.3 percent (now totaling $239.6 billion) from May’s upwardly revised estimate. Multifamily construction dropped off by 1.5 percent from May to June, down to $59.7 billion. Over-the-year, however, single-family spending rose by 4.8 percent.
“NAHB anticipates growth for new single-family spending over the course of 2016, consistent with the modest rise in single-family starts for the year,” said Na Zhao, Housing Policy Economist with NAHB.
This forecast was in line with that of Issi Romem, Chief Economist with BuildZoom, in the June edition of MReport.
“For the rest of the year, I expect you will see construction numbers continue to increase at a gradual pace, and you will probably see those prices continue growing as slowly as they have in the past year, if not a bit slower,” said Issi Romem, Chief Economist with BuildZoom, in the June edition of MReport. “My guess is that some parts of the country might be near an inflection point where they start dropping or at least stay level for a while. I don’t think there’s a big crash in our future, but I anticipate a modest slow-down of housing price growth in expensive coastal cities and continued growth in more expansive, lower-priced cities.”
Click here to see the entire construction spending report for June.