NAHB analysis of Census Construction Spending data, released Monday, shows that total private residential construction spending in the US stood at a seasonally adjusted annual rate of US$533 billion in February, a gain of 0.1% from the upwardly revised estimate of January. Over the past 12 months, total private residential construction spending was up 5.5%.
The monthly gains are largely attributed to the large increase in single-family and multifamily construction spending. Single-family construction spending increased 0.9% after advancing at the same margin in January. Spending on multifamily construction was up 1.2% after a decline of 1.7% in the prior month, reaching a US$64 billion annual pace in February. Remodelling spending declined for the second month in a row, down 1.5% in February. On a year-over-year basis, however, spending on home improvements increased by 1.4%.
Spending on private construction was at a seasonally adjusted annual rate of $982 billion, 0.7 per cent above the revised January estimate of US$975 billion.
In February, the estimated seasonally adjusted annual rate of public construction spending was US$291.1 billion, 2.1 percent below the revised January estimate of US$297 billion.
US House Prices, Savings Rates: Jan, Feb 2018
Spending on US private nonresidential construction increased 1.5% in February to a seasonally adjusted annual rate of $448.6 billion, according to US Census and NAHB data released Monday. The largest contribution to this month-over-month nonresidential spending increase was made by the class of office ($3.9 billion), followed by education ($1.1 billion), and commercial ($1.0 billion).Private nonresidential construction spending was 1.1% higher than a year ago, driven by gains in spending on commercial and transportation.
On a year-over-year basis, private residential construction spending is up 5%. Non-residential spending is up 1% year-over-year. Public spending is up 2% year-over-year.
Elsewhere, the Federal Housing Finance Agency reported Wednesday that mortgage contract rates on purchases of newly built homes rose by 11 basis points over the month of February to 4.14 percent, near its last peak level of 4.18 percent established one year ago in February 2017. Over the past year, the average mortgage rate on purchases of newly constructed homes fell by 25 basis points to 3.93 percent in October 2017. Since October, rates have risen by 21 basis points.
Freddie Mac’s estimate of mortgage rates has been rising since September 2017. The figure above illustrates that the 64 basis point increase in mortgage rates reflects a 68 basis point increase in the 3-month Treasury bill rate. Since this short-term rate is sensitive to the federal funds rate, it suggests that monetary policy actions in response to a strengthening economy are raising mortgage rates over this longer period of time.