The residential construction spending rate declined for the 18th straight month in August, the U.S. Census Bureau announced today, hitting its lowest level since November 2003 and dropping 16.5 percent compared to August 2006.
The construction spending report heaps on more statistics reflecting a decline in the U.S. housing market — earlier this week the Census Bureau announced that the new-home sales rate in August hit the lowest level for that month since August 1995, dropping 21.2 percent compared to August 2006. And the median new-home price dropped 7.5 percent compared to August 2006.
On Tuesday, the National Association of Realtors reported that sales of previously owned homes hit a five-year low in August, and the sales rate dropped 12.8 percent compared to the same month last year.
The rate of new-home sales hit a seven-year low in August and reached the lowest level for that month since August 1995, according to a U.S. Census Bureau and Department of Housing and Urban Development report released today.
Also, home builder Lennar Corp. announced its largest quarterly loss in the company’s 53-year history. The company reported a $514 million third-quarter loss and reported that it had cut its workforce by 35 percent, with more cuts expected in the fourth quarter.
KB Home on Thursday reported a third-quarter loss of $35.6 million, though that loss would have been about $478.6 million were it not for the sale of the company’s French home-building subsidiary.
After peaking at an all-time high of $696 million in February 2006, the rate of residential construction spending has declined in every month since.
During the first eight months of the year, total construction spending — both nonresidential and residential — was about $768 billion, or 3.3 percent below spending during the same period last year.
The seasonally adjusted annual rate of construction spending in August was $1.17 trillion, or about 1.7 percent below the August 2006 estimate. The rate is a projection of a monthly construction spending total over a 12-month period, adjusted to account for seasonal variations in construction spending.
The spending rate for private construction was at a seasonally adjusted annual rate of $875.5 billion, down 6.1 percent compared to August 2006. And the spending rate for private residential construction was $522.1 billion in August, compared with $625,436 in August 2006.
The rate of public construction spending was $291.1 million in August, up 14.7 percent compared to the rate in August 2006, with the rate of public safety construction spending rising 47.7 percent to $10 million compared to August 2006, health care construction spending rising 35.2 percent to $8.6 million, and office construction spending rising 24.7 percent to $10.5 million.
Month-to-month changes in seasonally adjusted statistics often show irregular movements, the Census Bureau reported, and it can take two months to establish an underlying trend for total construction and up to eight months for specific categories of construction.
Statistics in the spending report are estimated from several sources and surveys and are subject to sampling variability and nonsampling error. Statistics for the current month are preliminary estimates subject to revision.