Spending on home remodeling projects in the U.S. fell 5.5 percent in July, according to a report released today by the U.S. Department of Commerce. In contrast, spending on single-family homes rose 1.5 percent from the prior month, while outlays for multi-family home grew 2.8 percent. Overall spending on construction fell by 0.9 percent. Forecasters had predicted an overall gain of 0.4 percent.
While money spent on remodeling and renovation historically has made up about 25 percent of total construction spending, it currently accounts for about half of the market, according to BoA Merrill Lynch Global Research—this in the aftermath of the mortgage meltdown. In a Bloomberg.com report, Douglas Yearly, Toll Brothers CEO, attributes the surge in single-family home sales to pent-up demand and record low mortgage interest rates. A recent article in JLC Online offers strategic advice for builders who are considering “Getting Started in Multifamily Housing,” the strongest construction market sector last month.
See the Commerce Department data for July 2012 at “Value of Construction Put in Place at a Glance.”