A 3 percent increase in residential construction spending in May pushed overall construction spending up 0.9 percent for the month, the largest jump since December 2011.
A 3 percent increase in residential construction spending in May pushed overall construction spending up 0.9 percent for the month, the largest jump since December 2011. It was also an improvement from April, when overall construction spending rose by 0.6 percent, according to the Associated Press.
The increase brought residential construction spending to an annual rate of $261.3 billion. Many are taking this as further evidence that the housing market is beginning to recover slowly. Several other facts and figures from the Commerce Department corroborate the conclusion:
- Housing starts for single-family homes rose to their highest numbers in three and a half years in May 2012.
- The inventory of homes for sale dropped to its lowest point since 1963 in April, and only increased by 1,000 in May.
- The low supply, combined with extremely low mortgage rates, is encouraging buyers to act and driving home prices up in most markets.
The Commerce Department data also showed nonresidential construction spending increased 0.4 percent in May 2012 — the third straight month it has done so — while spending on government projects fell by 0.4 percent. The total annual rate for all construction spending is now $830 billion.
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