Private residential construction spending is spending on construction by private parties and homeowners. Data about this construction spending is collected from retail and wholesale outlets nationally. It seems that homeowners and small builders have a positive outlook on the economy and are spending money on new home construction on their own land or lot, as well as additions and remodeling to existing homes that they own. Many people buy land and hold it for awhile before they decide to build a new home. By owning land, there is an opportunity for new home builders to be able to more easily qualify for a construction loan by utilizing the equity in the land.
In addition to new home construction, homeowners are improving their homes as well, by contracting popular remodeling projects, such as kitchen, master bath, and outdoor area remodels. Additions of pool houses, mother-in-law suites, and over-the-garage apartments are also popular construction projects for existing homeowners, which contribute money to the total amount of private construction spending during the month of July.
The National Association of Home Builders (NAHB) did an analysis of the Census Construction Spending, and the data showed an increase of private residential construction spending of .8% in July over June, 2017, to an amount of $523.1 billion. This increase was also an 11.6% increase year-over-year compared to 2016, and it was the third consecutive monthly increase for private construction spending after it went down slightly in April, 2017.
The breakdown in construction spending between single-family home construction and home improvement of existing homes shows that new home construction went up by .8% compared to June to reach $264.1 billion, and $192.4 billion was spent on home remodeling or renovation, which was a 1.41% increase month-over-month. Also remodeling / renovation spending was up a total of 16.5% year-over-year compared to July, 2016.