The U.S. Census Bureau of the Department of Commerce announced that construction spending during July 2018 was estimated at a seasonally adjusted annual rate of $1.32 billion, 0.1% above the revised June estimate of $1.31 billion.
The July figure is 5.8% above the July 2017 estimate of $1.24 billion.
Spending on private construction was at a seasonally adjusted annual rate of $ $1,010.9 billion, 0.1% below the revised June estimate of $1,011.9 billion.
Of that, residential construction was at a seasonally adjusted annual rate of $560.1 billion in July 0.6% above the revised June estimate of $556.7 billion.
However, July’s National Association of Home Builders/Wells Fargo Housing Market Index report indicated builder confidence in the market for newly-built single-family homes remained unchanged at 68 points.
The report states that although Homebuilders are encouraged by the growing housing demand, construction material costs still continue to hinder optimism.
This proves to be true, as August’s Housing market index revealed a starker truth.
According to the report, concerns about market affordability contributed to homebuilder confidence falling one point to 67 in August, which is its lowest in level in 2018.
NAHB Chief Economist Robert Dietz said builders are monitoring how tariffs and the impending trade war are affecting key building material prices, including lumber.
“The good news is that builders continue to report strong demand for new housing, fueled by steady job and income growth along with rising household formations,” NAHB Chairman Randy Noel said. “However, they are increasingly focused on growing affordability concerns, stemming from rising construction costs, shortages of skilled labor and a dearth of buildable lots.”