The U.S. Census Bureau announced that construction spending during June 2019 was estimated at a seasonally adjusted annual rate of $1.29 trillion.
Although June’s rate is similar to May’s, the organization indicated June’s spending is 1.3% below the June 2018 estimate of $1.31 trillion. This means June's level now represents the largest decline since November of last year.
Spending on private construction was at a seasonally adjusted annual rate of $962.9 billion, 0.4% below the revised May estimate of $967 billion.
Of that, residential construction spending was at a seasonally adjusted annual rate of $507.2 billion in June, which is 0.5% below the revised May estimate of $509.7 billion.
June’s Housing Market Index revealed that as cost and labor concerns continue to grow, homebuilder confidence has begun to diminish.
According to the National Association of Home Builders and Wells Fargo, the index measuring current sales conditions retreated to 71 points and expectations for the next six months dropped to 70.
“Despite lower mortgage rates, home prices remain somewhat high relative to incomes, which is particularly challenging for entry-level buyers,” NAHB Chief Economist Robert Dietz said. “And while new home sales picked up in March and April, builders continue to grapple with excessive regulations, a shortage of lots and lack of skilled labor that are hurting affordability and depressing supply.”