July 31, 2021

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Mortgage News

Residential Outlays Dominate Construction Spending

Public and private construction spending in February was a seasonally adjusted annual rate of $ 1.517 trillion. The US Census Bureau said this was a 0.8 percent decrease from the January rate of $ 1.529 trillion, but was 5.3 percent higher than spending in February 2020. On an unadjusted basis, these were over the course of of the month totaled $ 105.612 billion in construction. Almost half of that was spent in the residential sector. For the current year (YTD) total spending was $ 213.204 billion. That’s an increase of 4.9 percent from the $ 203.215 billion spent in the first two months of 2020.

The privately financed construction was completed at a seasonally adjusted annual rate of $ 1.166 trillion, a decrease of 0.5 percent from the previous month from $ 1.172 trillion in January. Spending was 7.1 percent above the rate in February 2020.

Housing spending was $ 717.912 billion per year, of which $ 376.794 was used to build single-family homes. The changes compared to January were minor. Overall, residential construction increased by 21.1 percent compared to February 2020 and spending on single-family homes was 20.9 percent higher. Apartment building spending declined 93 percent to $ 93.156 billion for the month, but increased 14.6 percent annually.

The dominance of the residential sector can be seen in the unadjusted figures for February. Total private sector spending was $ 83.312 billion and residential real estate spending was 59 percent of total spending at $ 49.192 billion and about $ 15 billion more than all non-residential spending.

YTD private sector spending was $ 168.636 billion, an increase of 6.5 percent in the same period last year. Residential real estate spending is up 22.1 percent year-to-date to $ 100.041 billion, and spending on single-family homes is up 25.4 percent.

Publicly funded construction was $ 351.206 billion per year in February, down 1.7 percent from January and 0.3 percent year over year. Small dollar housing spending continued the big increases that had started in 2020. The annual rate for February was $ 9.508 billion, an annual increase of 24.8 percent.