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Private Residential Construction Spending Slips in January – Eye On Housing

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Private residential construction spending declined 0.8% in January 2026, following two months of gains. This decline was driven by lower spending across single-family, multifamily construction, and home improvement.  Despite the monthly decline, total residential construction spending remained 2.3% higher than a year ago.

According to the latest construction spending data from the U.S. Census, single-family construction spending edged down by 0.2% in January, consistent with the softer builder confidence reflected in the NAHB/Wells Fargo Housing Market Index (HMI). Compared to a year ago, single-family construction spending was down 5.8%. Meanwhile, multifamily construction spending also decreased mildly, falling 0.7% in January. This marks the second monthly decrease following six consecutive months of modest gains. Compared to a year earlier, multifamily spending was 0.4% higher. Improvement spending (remodeling) declined 1.4% for the month but remained a bright spot on a year-over-year basis, rising 12.5%.

The NAHB construction spending index is shown in the graph below. The index illustrates how   spending on single-family construction has slowed since early 2024, reflecting the impacts of elevated interest rates and ongoing uncertainty over building material tariffs. Multifamily construction spending growth has also slowed down after the peak in July 2023, with the index largely plateauing since late 2024. In contrast, improvement spending has been on an upward trend since the beginning of 2025, supported in part by the aging housing stock and sustained demand for renovation.

Spending on private nonresidential construction was down 3% over a year ago. The annual private nonresidential spending decrease was primarily driven by a $35 billion drop in manufacturing construction spending, followed by a $0.8 billion decrease in commercial construction spending.



This article was originally published by a eyeonhousing.org . Read the Original article here. .

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Private Residential Construction Spending Edges Higher in December – Eye On Housing

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Private residential construction spending was up 1.5% for the last month of 2025. This modest gain was driven primarily by increased spending on home improvements and single-family construction. Despite this increase, total spending remained 1.3% lower than a year ago, reflecting the continued impact of housing affordability challenges facing the sector.

According to the latest construction spending data from the U.S. Census, single-family construction spending was up by 1.6% in December, consistent with the soft builder confidence reflected in the NAHB/Wells Fargo Housing Market Index (HMI). Compared to a year ago, single-family construction spending decreased 3.6%. Meanwhile, multifamily construction spending edged up 0.1% in December, marking a seventh consecutive month of modest gains. Compared to a year earlier, multifamily spending was 2.9% higher. Improvement spending (remodeling) rose 1.8% for the month but stayed flat relative to a year ago.

The NAHB construction spending index is shown in the graph below. The index illustrates how   spending on single-family construction has slowed since early 2024 under the pressure of elevated interest rates and concerns over building material tariffs. Multifamily construction spending growth has also slowed down after the peak in July 2023, with the index largely plateauing since late 2024. In contrast, improvement spending has been on an upward trend since the beginning of 2025.

Spending on private nonresidential construction was down 1.8% over a year ago. The annual private nonresidential spending decrease was primarily driven by a $26 billion drop in manufacturing construction spending, followed by a $2 billion decrease in healthcare construction spending.



This article was originally published by a eyeonhousing.org . Read the Original article here. .

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Residential Building Worker Wages Slow in 2025 Amid Cooling Housing Activity – Eye On

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Wage growth for residential building workers moderated notably in 2025, reflecting a broader cooling in housing activity and construction labor demand. According to the latest data from the U.S. Bureau of Labor Statistics (BLS), both nominal and real wages remained modest during the fourth quarter, signaling a shift from the rapid post-pandemic expansion to a slower-growth phase.

In nominal terms, average hourly earnings (AHE) for residential building workers rose to $39.63 in December 2025, up 3.3% from $38.37 a year ago. While this marked a modest acceleration from November’s 2.0% year-over-year gain, wage growth has slowed considerably from the peak of 9.4% recorded in June 2024. Elevated mortgage rates, ongoing affordability challenges, and persistently high construction costs constrained home building activity over the past year. As a result, labor demand eased accordingly. Meanwhile, the number of open, and unfilled construction sector jobs continued to trend downward, consistent with the overall slowdown in housing activity.

Despite the slowdown in wage growth, residential building workers’ wages remain competitive relative to other industries:

9.9% higher than the manufacturing sector ($36.07 per hour)

23.3% higher than the transportation and warehousing sector ($32.14 per hour)

2.6% lower than the mining and logging sector ($40.69 per hour)

Note:

Data used in this post relate to all employees in the residential building industry. This group includes both new single-family housing construction (excluding for-sale builders) and residential remodelers but does not include specialty trade contractors.



This article was originally published by a eyeonhousing.org . Read the Original article here. .

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Weaker Demand, Unchanged Lending Conditions for Residential Mortgages in Fourth Quarter –

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Lending standards for most types of residential mortgages were essentially unchanged but overall demand was weaker in the fourth quarter of 2025, according to the recent release of the Senior Loan Officer Opinion Survey (SLOOS). However, for commercial real estate (CRE) loans, lending standards for multifamily were looser, while standards for construction & development were essentially unchanged. Demand for construction & development loans was stronger, while demand for multifamily loans was essentially unchanged for the quarter. 

After three consecutive 25 basis point cuts to finish 2025, the Federal Reserve decided to maintain its key short-term interest rate (i.e., Federal Funds) unchanged during its first meeting of 2026. Participants on the Federal Open Market Committee (FOMC) continue to assess how to weigh the components of its dual mandate, as inflation continues to be above the stated target of 2% (i.e., the case for higher rates) while the economy is experiencing further deceleration in job growth (i.e., the case for lower rates). Given the current macroeconomic landscape and a change in leadership at the Fed as Jerome Powell’s term as Chair ends in May, NAHB anticipates that any further rate cuts will occur in the latter half of this year.

Residential Mortgages

In the fourth quarter of 2025, three of seven residential mortgage loan categories; GSE-eligible, Qualified Mortgage (QM) non-jumbo non-GSE eligible, and Government, saw a positive net easing index for lending conditions with an additional two (non-QM non-jumbo and QM jumbo) recording a neutral reading (i.e., 0). Subprime and non-QM jumbo loans experienced tighter lending conditions, as evidenced by a negative value, -8.3 and -4.2 respectively.

All seven residential mortgage loan categories reported weaker demand in the fourth quarter of 2025, with the weakest demand coming from subprime loans. This category has experienced weaker demand for 22 consecutive quarters.

Commercial Real Estate (CRE) Loans

For the CRE loan categories, multifamily registered a net easing index of +5.5 for the fourth quarter of 2025, indicating looser credit conditions for the first time since Q1 2022. As a reminder, this was when the Federal Reserve began their aggressive rate hiking path, which saw the Federal Funds rate increase by 525 basis points over a year and a half period. For construction & development loans, the net easing index was -1.8, or essentially unchanged.

The net percentage of banks reporting stronger demand was 8.9% for construction & development loans, with a positive number indicating stronger demand. This is the first time construction & development has been positive since Q4 2021. For multifamily loans, demand was -1.9% in the fourth quarter of 2025, which is essentially unchanged according to the Fed’s classification scheme (i.e., between -5.0% and +5.0%).



This article was originally published by a eyeonhousing.org . Read the Original article here. .

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Private Residential Construction Spending Edges Higher in October on Home Improvements – Eye

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Private residential construction spending was up 1.3% in October, rebounding from a 1.4% decline in September 2025. This modest gain was primarily driven by increased spending on home improvements. Despite this increase, total spending remained 1.3% lower than a year ago, as the housing sector continues to navigate the economic uncertainty stemming from ongoing tariff concerns and elevated mortgage rates.

According to the latest U.S. Census construction spending data, single-family construction spending declined 1.3% in October, consistent with the soft builder confidence reflected in the NAHB/Wells Fargo Housing Market Index (HMI). Compared to a year ago, single-family construction spending decreased by 6.1%. Meanwhile, multifamily construction spending edged down 0.2% in October after four consecutive months of modest gains. Compared to a year earlier, multifamily spending was still down 2.8%. Improvement spending (remodeling) rose 4.5% for the month and was up 4.4% compared to a year ago.

The NAHB construction spending index is shown in the graph below. The index illustrates how   spending on single-family construction has slowed since early 2024 under the pressure of elevated interest rates and concerns over building material tariffs. Multifamily construction spending growth has also slowed down after the peak in July 2023, with the index largely plateauing since late 2024. In contrast, improvement spending has been on an upward trend since the beginning of 2025.

Spending on private nonresidential construction was down 2.6% over a year ago. The annual private nonresidential spending decrease was primarily driven by a $23 billion drop in manufacturing construction spending, followed by a $3.8 billion decrease in commercial construction spending.



This article was originally published by a eyeonhousing.org . Read the Original article here. .

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Residential Construction Softens Amid Ongoing Housing Market Headwinds – Eye On Housing

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The latest residential housing market report, delayed by the federal government shutdown last fall, indicates that builders have faced significant headwinds in recent months. Elevated mortgage rates earlier in the year have restrained buyer demand and weighed on home building activity, alongside persistently high construction costs.

Overall housing starts declined 4.6 percent in October to a seasonally adjusted annual rate of 1.25 million units, according to the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. This pace reflects the number of housing units builders would begin over the next 12 months if October’s activity were sustained.

Within the total, single-family starts rose 5.4 percent to a seasonally adjusted annual rate of 874,000 units but remain 7.8 percent lower than a year earlier. On a year-to-date basis, single-family starts are down 7.0 percent. Given recent volatility, the three-month moving average provides a clearer signal, declining to 857,000 units.

In contrast, multifamily starts, which include apartment buildings and condominiums, fell sharply, down 22.0 percent to an annualized pace of 372,000 units. The three-month moving average for multifamily construction has trended lower to 424,000 units, and activity is 7.9 percent below year-ago levels.

Regionally and on a year-to-date basis, combined single-family and multifamily starts increased 9.1 percent in the Midwest and 8.5 percent in the Northeast, while declining 1.9 percent in the West and 4.1 percent in the South.

The total number of housing units under construction stood at 1.3 million in October, down 10.1 percent from a year earlier. Single-family homes under construction fell to 596,000 units, a 7.0 percent year-over-year decline and the lowest level since November 2020. Multifamily units under construction declined to 790,000, down from peaks above 1 million units in December 2023 and 4.0 percent lower than a year ago.

Completions of single-family homes remained relatively strong at an annual rate of about 1 million units, reflecting continued progress in finishing projects already underway and marking a 2.0 percent increase from a year earlier. Multifamily completions, however, dropped sharply, down 41.7 percent year over year to a 377,000-unit pace. On a year-to-date basis, total completions across both sectors are down 9.2 percent.

Overall building permits edged down 0.2 percent in October to a 1.41-million-unit annualized rate. Single-family permits declined 0.5 percent to 876,000 units and are 9.4 percent lower than a year ago, with year-to-date permits down 7.0 percent. Multifamily permits were essentially unchanged at a 536,000-unit pace compared to the previous month and are up 16.3 percent compared to October 2024. Regionally, year-to-date total permits increased 5.9 percent in the Midwest, while declining 3.3 percent in the West, 4.0 percent in the South, and 9.3 percent in the Northeast.



This article was originally published by a eyeonhousing.org . Read the Original article here. .

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Top Posts – Residential Remodelers Outnumber Single-family Builders in the U.S. – Eye On

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The number of residential remodelers in the U.S. has reached a record high of 128,187 establishments, 65% higher than the number of residential builders (single-family and multifamily), which stands at 77,455.  These official government counts were released by the U.S. Census Bureau as part of its 2022 Economic Census, which tallies American businesses every five years (in years ending in 2 and 7).

Growth in the number of remodelers significantly outpaced that of builders between 2017 and 2022. In that 5-year span, the remodeler count increased by 25% (102,818 to 128,187), while the number of builders grew at half that pace–by 12% (68,996 to 77,455).

A starker dichotomy emerges when comparing 2022 counts to those in 2007, prior to the financial crisis and the ensuing housing recession.  In that 15-year period, the official number of residential remodelers in the U.S. grew by 73% (73,888 to 128,187), while the official number of residential builders contracted by 21% (98,067 to 77,455).

Another way to analyze this data is by creating a combined universe of both builders and remodelers and then calculating each group’s share of the total. In 2022, for example, remodelers represented 62% of the total number of builders and remodelers in the U.S, while builders made up a minority share of 38%.  Remodelers have accounted for at least 60% of this total in the last three Economic Census (2012, 2017, and 2022). 

The last time builders comprised a majority share was in 2007, when they represented 57% of the combined total number of builders and remodelers in the country.



This article was originally published by a eyeonhousing.org . Read the Original article here. .

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August Private Residential Construction Spending Edges Higer  – Eye On Housing

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Private residential construction spending inched up 0.8% in August, continuing steady growth since June 2025. This modest increase was primarily driven by more spending on multifamily construction and home improvements. However, total spending was 2% lower than a year ago, as the housing sector continues to navigate the economic uncertainty stemming from ongoing tariff concerns and elevated mortgage rates. 

According to the latest U.S. Census construction spending data, single-family construction spending slipped 0.4% in August, in line with the soft builder sentiment reflected in the August NAHB/Wells Fargo Housing Market Index (HMI). Compared to a year ago, single-family construction spending decreased by 1.1%. Improvement spending (remodeling) posted a solid 8.2% gain for the month, but it remained 1.3% lower than in August 2024. The remodeling sector continues to show resilience, supported by strong homeowner equity and persistent demand for home improvements. Meanwhile, multifamily construction spending rose 0.2% in August, marking a pause in the downward trend that began in mid-2023. Compared to a year earlier, multifamily spending was down 7.1%.  

The NAHB construction spending index is shown in the graph below. The index illustrates how   spending on single-family construction has slowed since early 2024 under the pressure of elevated interest rates and concerns over building material tariffs. Multifamily construction spending growth has also slowed down after the peak in July 2023. Improvement spending has also been weakening since the beginning of 2025. 

Spending on private nonresidential construction was down 4% over a year ago. The annual private nonresidential spending decrease was primarily driven by a $20 billion drop in manufacturing construction spending, followed by a $11 billion decrease in commercial construction spending.



This article was originally published by a eyeonhousing.org . Read the Original article here. .

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Unchanged Lending Conditions for Residential Mortgages in Third Quarter – Eye On Housing

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Lending standards for most types of residential mortgages were essentially unchanged, according to the recent release of the Senior Loan Officer Opinion Survey (SLOOS). For commercial real estate (CRE) loans, lending standards for construction & development were modestly tighter, while multifamily was essentially unchanged.  Demand for both CRE categories was essentially unchanged for the quarter. 

Two weeks ago, the Federal Reserve eased its key short-term interest rate (i.e., Federal Funds) by 25 basis points for the second consecutive meeting, establishing an upper bound of 4.00%.  While the causal link between the Federal Funds rate and the 30-year fixed rate mortgage is minimal, these cuts will have a more tangible impact for private home builders through lower rates on acquisition, development, & construction (AD&C) loans.  Roughly 60% of single-family starts are built by private builders. With pressure from both sides of their dual mandate as the job market cools and inflation remains sticky, NAHB is forecasting a measured approach from the Fed when it comes to further rate cuts next year.

Residential Mortgages

In the third quarter of 2025, four of seven residential mortgage loan categories saw a positive net easing index for lending conditions with an additional two recording a neutral reading (i.e., 0).  Only subprime loans experienced tighter lending conditions, as evidenced by a negative value (-6.3).  Nevertheless, based on the Federal Reserve classification of any reading between -5.0 and +5.0 as “essentially unchanged,” all but subprime fell within this range.

Five of the seven residential mortgage loan categories reported stronger demand in the third quarter of 2025, with the strongest demand coming from Government, GSE-eligible, and Qualified Mortgage (QM) non-jumbo, non-GSE eligible loans.  Non-QM jumbo was essentially unchanged for the quarter, while subprime loans were the only category to experience weaker demand, which has been the case since Q3 of 2020.

Commercial Real Estate (CRE) Loans

For the CRE loan categories, construction & development loans registered a net easing index of -6.6 for the third quarter of 2025, indicating modestly tighter credit conditions.  For multifamily loans, the net easing index was -1.6, or essentially unchanged.  Both categories of CRE loans show tightening of lending conditions (i.e., net easing indexes below zero) since Q2 2022.  However, the tightening has become less defined recently for multifamily, with its net easing index essentially unchanged (i.e., between -5.0 and +5.0) for four consecutive quarters.

The net percentage of banks reporting stronger demand was -4.9% for construction & development loans, with a negative number indicating weaker demand.  For multifamily, demand was neutral (i.e., 0) in the third quarter of 2025, with the same number of banks that reported weaker demand as those who reported stronger demand.  However, demand for CRE loans within both categories has experienced unchanged conditions (i.e., between -5.0% and +5.0%).



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How Renovation is Reshaping Residential Construction – Eye On Housing

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As the nation’s housing stock continues to age and new homes remain out of reach for many buyers, remodeling is capturing a growing share of the residential construction market, both in terms of the number of firms and employment. With most U.S. households unable to afford new construction, renovation has become a more practical and cost-effective alternative to improve housing conditions, driving demand on the consumer side. On the supply side, many home builders undertake remodeling projects to grow their business. NAHB’s analysis of the quarter-century of Quarterly Census of Employment and Wages (QCEW) data suggests that the rise of remodelers is a sustained structural shift rather than a temporary post-pandemic surge.

Remodeling Firms’ Share in Residential Construction is Rising
Over the past 25 years, the number of remodeling establishments has nearly doubled—from fewer than 69,000 in 2000 to more than 128,000 in the first quarter of 2025. Remodelers now represent over half (56%) of all residential building construction (RBC) establishments. By contrast, during the mid-2000s housing boom, remodelers’ share consistently hovered around 38–39%, when the market was dominated by home builders, including new single-family and multifamily general contractors as well as speculative (spec) home builders.

Although the remodeling sector was not immune to the 2008 housing crash, its losses were modest compared to the contraction of home building. Between 2007 and 2012, the number of remodeling establishments fell by 8%, while roughly one-third of home builders went out of business. As a result, the remodeler’s share of the RBC sector rose sharply after the crash, reaching 46% in 2011, and has continued to climb steadily ever since.

During the post-pandemic housing boom, driven by low mortgage rates, the rise of remote work, and a renewed demand for larger living spaces, both remodelers and home builders experienced solid growth. However, remodelers expanded their ranks at a faster pace, with their share of RBC firms climbing to 54% by 2022. Less sensitive to fluctuations in mortgage rates than home builders, remodelers have continued to grow even amid a series of aggressive Federal Reserve rate hikes that sharply increased the cost of home purchases and slowed new construction. As of 2024, remodeling firms account for 56% of all RBC establishments.

Remodeling Employment Share in RBC is Rising

In the overall construction industry, which encompasses residential and non-residential building construction, as well as heavy/civil engineering construction, land subdivision, and specialty trade contractors, it is the latter that dominate the overall sector employment. However, the government employment surveys cannot identify what portion of subcontractors’ business is devoted to remodeling. As a result, RBC is the subsector that allows tracking the remodeling trends best.

The analysis of employment trends in residential building construction reveals a similar pattern, with remodelers generating a rising number and share of jobs, largely at the expense of single-family general contractors. As of 2024, the remodeling sector accounted for almost half (49%) of RBC workers. In contrast, during the housing boom of the mid-2000s, only 30% of payroll employees worked for remodelers, while single-family general contractors employed 63% of the RBC workforce.

The shift is even more pronounced within the production (nonsupervisory) workforce of the RBC industry.  More than half (51.2%) of these skilled craftsmen now work for remodeling firms, compared with roughly 30% in the early 2000s, according to NAHB’s analysis of historical data from the Bureau of Labor Statistics’ Current Employment Statistics (CES) survey.

Multifamily general contractors, who subcontract out most of their construction work, account for a smaller share of home building jobs but have also gained ground. Fueled by strong multifamily activity in 2022–2023, their share of RBC employment grew to 5% by 2024. For-sale builders account for an additional 6%.

The typical remodeling firm remains small, averaging between 3 and 4 employees per establishment, comparable to levels observed during the mid-2000s housing boom. This stability suggests that the overall rise in remodeling employment stems primarily from the creation of new firms or the reclassification of home builders shifting toward renovation work as remodelers. It is likely that, as market conditions change, some home builders, particularly smaller single-family general contractors, pivot toward renovation projects to stay and grow their business. The remodeling sector’s lower barriers to entry, smaller upfront investments compared to new construction, and fewer regulatory hurdles make the transition easier.

As more companies view remodeling as their primary activity and revenue source, more will be reclassified as remodeling establishments in the official data reporting. This is because data collection in the U.S. is guided by the North American Industry Classification System (NAICS). Under NAICS, a company self-classifies and chooses the industry code that best captures its primary activity. In some surveys, such as the Economic Census, the Census Bureau emphasizes revenue sources as a primary metric for categorizing businesses. The steadily rising number of remodelers and the jobs they create underscores that renovation has become the reliable engine driving growth in the residential construction sector.



This article was originally published by a eyeonhousing.org . Read the Original article here. .

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