The NAHB’s analysis of construction spending shows that total private residential construction spending in November 2017 rose to the highest level in 10 years, up 1 percent from October 2017 to $530.8 billion.
This growth is being linked to the NAHB’s latest assessments of builder confidence. At the end of 2017, builder confidence in the new single-family housing market increased five points to 74, the highest since July 1999. The association attributes the recent improvement to hopes of an eased regulatory environment for residential construction firms.
Private nonresidential construction spending between October and November 2017 increased 0.9 percent to a seasonally adjusted annual rate of $433 billion. However, private nonresidential construction spending dropped 3.1 percent from 2016 to 2017.
In January 2018, the Joint Center for Housing Studies of Harvard University released new data on remodeling activity in the U.S. In a conclusion similar to the NAHB’s, the Joint Center cited steady growth in single-family construction and in home improvement spending over the course of the last 10 years.
“Steady gains in the broader economy, and in home sales and prices, are supporting growing demand for home improvements,” Chris Herbert, managing director of the Joint Center, said in a statement. Herbert added that the remodeling market’s rise is expected to continue due in large part to restoration projects in California, Florida, Texas, and other regions of the country hit by record-setting natural disasters in 2017.
Abbe Will, research associate in the Remodeling Futures Program at the Joint Center, acknowledged in a statement that low for-sale housing inventory and the critical construction industry labor shortage still pose challenges, but said that, even so, 2018 may see the sharpest gains for home remodeling in over a decade. “Annual growth rates have not exceeded 6.8 percent since early 2007, before the Great Recession hit,” Will noted.