US residential construction spending is declining

We look back at North American construction spending in 2022

Residential construction spending reached its peak in 2022 after increasing for 24 consecutive months, followed by a downturn beginning in June that lasted the remainder of the year.

The seasonally adjusted annual rate (SAAR) of residential construction spending reached its record high of $945.2 billion in May of last year, according to the US Census Bureau. For the remainder of 2022, spending dropped steadily each month to the December reading of $857.2 billion (SAAR).

For all of 2022, private residential construction spending totaled $899.1 billion, an increase of 13.3% over 2021. Those expenditures made up 62.9% of all construction spending, up marginally from 62.0% in 2021.

Out of the $899.1 billion spent last year on residential construction, $442.5 billion went to the building of single-family homes and $105.0 billion to multifamily. The remainder, $351.6 billion, was used on residential improvements, such as repair and remodeling, which excludes upgrades on rental, vacant, and seasonal homes.

Compared with December 2021, single-family construction spending dropped 14.7% in December of last year. In the same year-over-year comparison, multifamily outlays increased 20.7%.

The rapid rate of growth in home prices and construction costs were key factors in the escalation of construction spending over the last few years. The downturn is more in line with those now established norms. While residential spending (not seasonally adjusted) dropped 28.7% from May through December of last year, housing starts (not seasonally adjusted) dropped 30.7% over the same period.

Stay ahead of wood products market changes by joining your peers in subscribing to the Random Lengths weekly reportSpeak to our team and find out more about our price products, forecasts and how Fastmarkets can help your business.

What to read next
Paracel’s current 103,000 hectares (ha) of eucalyptus plantations are sufficient for the start-up of the company’s planned new greenfield mill in Paraguay by 2027, chief executive officer Flavio Deganutti confirmed to Fastmarkets in an exclusive interview. Paracel has continued to make progress in its project to build a new 1.8-million-tonne-per-year bleached eucalyptus kraft (BEK) pulp […]
U.S. housing starts in February posted a double-digit percentage increase month-over-month as construction picked up following a weather-related lull in January. Want to predict the future of the lumber market? Learn more about our short-term and long-term forecasts and asset analysis for the global forest products market today. Learn more. The Census Bureau reported total U.S. starts at […]
No feedback was received during the consultation period and therefore we will discontinue Region 4 pricing. This consultation, sought to ensure that our methodologies continue to reflect the physical market under indexation, in compliance with the International Organization of Securities Commissions (IOSCO) principles for Price Reporting Agencies (PRAs). This includes all elements of our pricing […]
What is the outlook for key raw materials in the construction industry in 2024, including steel, scrap, aluminium and lumber?
Fastmarkets advises that, as of Friday March 8, 2024, certain monthly North American ferrous scrap assessments are yet to settle.
Fastmarkets adjusted its assessments for the stainless steel scrap 430 bundles, solids, consumer buying price, delivered mill Pittsburgh and the stainless steel scrap 409 bundles, solids, consumer buying price, delivered mill Pittsburgh effective Monday February 12.