Construction spending beat expectations to start the new year, according to the Census Bureau’s Monthly Construction Spending report…(Census Bureau)
- M-O-M: Total construction spending was up 1.3% to a seasonally adjusted annual rate of $1.677 trillion in January. Economists had projected a much smaller increase of just 0.2%.
- Y-O-Y: Construction spending was up 8.2% when compared to the same time one year ago.
The news was even better when it came to residential spending which was up 1.3% since December and was up an impressive 13.2% when compared to the same time last year ago.
- NOTE: Private spending was up 13.4% year-over-year while public spending was actually down 5.6%.
Answering consumer demand construction spending is being heavily directed to single-family projects over multi-family projects as we start 2022…
- Single-family construction spending was up 1.2% month-over-month and was up 15.4% year-over-year.
- Multifamily construction spending was actually down 0.1% month-over-month but was still up 4.8% year-over-year.
With inventory levels remaining at historic lows any uptick in construction is not only welcome but necessary. Rising mortgage rates should put some downward pressure on demand, but it will also discourage current homeowners from moving. This means we have to literally build our way out of this inventory shortage and continued monthly increases is the way we will do it.
