The National Association of Realtors (NAR) released data showing large gains in single-family and multifamily construction spending nationally. Locally, 2014 isn’t performing like originally projected. This is in part due to higher land costs in 2013, land values have since flattened in most areas.
In June we posted the article how New Residential Spending is Improving, and if you missed the article discussing how July’s home building rate solidly beat economists’ median forecast of 965,000 and was the strongest since November, read that article here.
A few days we posted an article about Nonresidential Construction Spending Rebounding in July, if you own property in a commercial or industrial zone take a look at that article. We also released an article discussing how the commercial real estate development industry grew at the strongest pace since the economic recovery began in 2011, to read it click here.
If you are a landowner and don’t know what zone you are in, we have posted land use maps and links so that you can easily find out, click here to be directed to that page.
The latest Census estimate shows significant gains in single-family and multifamily private residential construction spending from one year ago. On a 3-month moving average basis from July 2013, single-family construction spending increased 9.9% and multifamily construction spending increased 38.4%. The current seasonally adjusted annual rate for total private residential construction spending (single-family, multifamily, and home improvements) is $358.1 billion.
Although the home improvement component of residential construction spending is down 2.2% from one year ago, the current reading is 1.2% higher than the revised June estimate. In fact, all three categories of residential construction spending increased from the prior month. Single-family spending increased 0.5% and multifamily spending increased 0.2% month-over-month.
The increase in construction spending matches the improvement in builder sentiment. The August NAHB/ Wells Fargo Housing Index rose another two points in to 55. An index reading above 50 indicates more builders see the market improving than see it getting worse.