Private residential construction spending rose 0.3% in May and 1.8% year-over-year to a seasonally adjusted annual rate of $930.2 billion—its third consecutive monthly gain, albeit at a slower pace—according to the National Association of Home Builders' analysis of U.S. Census Bureau data. Remodeling drove the increase.
Home improvement spending was the only residential sector to post a monthly gain, rising 0.9% for the month and 8.1% over the year. Single-family construction spending slipped 0.1% in May and was down 4.0% year-over-year, consistent with the weak builder sentiment reflected in the NAHB/Wells Fargo Housing Market Index. Multifamily spending also edged down 0.1% for the month, though it remained up 3.3% from a year ago.
Single-family spending has slowed since early 2024 amid elevated interest rates and uncertainty over building material tariffs, NAHB said, while home improvement spending has trended upward since the start of 2025, supported by an aging housing stock and sustained demand for renovation.
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