Private residential construction spending decreased in September 2026 driven by a steep decline in improvement (remodeling) spending. According to the latest construction spending data from the U.S. Census Bureau, private residential construction spending came in at a seasonally adjusted annual rate (SAAR) of $848.8 billion in September, down 5.5% from the revised August estimates and lower by 8.9% from last year.
The decrease in spending was primarily due to a sharp decline in improvement (remodeling) spending, which declined 13.0%. Over the year, remodeling spending was down 18.0%. Both spending on single-family and multifamily construction were unchanged from August but were down by 2.4% and 0.2% from a year ago, respectively. The decline in single-family construction spending is consistent with weak builder sentiment reflected in the NAHB/Wells Fargo Housing Market Index (HMI), amid rising interest rates, energy and material costs.
The NAHB construction spending index shown in the graph below illustrates how spending on single-family construction has slowed since early 2024, reflecting the impacts of elevated interest rates and ongoing uncertainty over building material tariffs. Multifamily construction spending growth has also slowed down after the peak in June 2023, with the index largely plateauing since late 2024.
In contrast, improvement spending has been on an upward trend since 2023, supported in part by the aging housing stock and sustained demand for renovation. However, the latest data is consistent with a 2026 soft patch for remodeling.
Private nonresidential construction spending continued its upward trend. September’s spending rose 1.1% to a SAAR of $790.6 billion, and is 2.3% higher compared to the previous year. Data center construction, a subcategory within office construction, remained strong with spending increasing 8.6% month-over-month and 90.3% year-over-year, due to buildout of artificial intelligence infrastructure. The share of data centers as a percentage of spending on total private nonresidential construction stood at 12.2% in September 2026.
