Construction spending picked up in July as material costs fell from all-time highs and employment in the industry increased, according to the US Census Bureau.
The seasonally adjusted dollar volume in construction reached $ 1.569 trillion for the month, up 0.3% or $ 5.4 billion from June's $ 1.563 trillion and 9% or $ 129.2 billion. $ 1.44 trillion in July 2020.
The private sector accounted for $ 1.231 trillion, seasonally adjusted, up 0.3% monthly from $ 1.228 trillion and 13.5 percent annually from $ 1.084 trillion. Publicly funded construction was $ 337.8 billion in July, 0.7% more than $ 335.6 billion month-over-month, while it was down 5.1% from $ 356 billion year-over-year.
Housing spending increased 0.5% from June and 27% as of July 2020 to an adjusted annual rate of $ 782.1 billion. The publicly funded housing volume was $ 9.17 billion, down from $ 9.07 billion the previous month, but down from $ 9.55 billion a year earlier.
Privately funded housing spending rose to $ 773 billion in July, from $ 768.9 billion monthly and $ 608.6 billion annually. Single-family homes totaled $ 416.3 billion, down from $ 412.7 billion in June and $ 283.1 billion in July 2020. Meanwhile, multi-family home construction has dropped from $ 98.82 billion $ 98.78 billion, but up from $ 86 billion last year.
Housing created 8,300 jobs in July, according to the Bureau of Labor Statistics. August came with 17,400 more, an indicator that spending could continue to rise.
"These strong job increases are likely to help construction companies manage their current backlog, which we believe should help alleviate supply bottlenecks in the sector," said Mark Palim, Fannie Mae's deputy chief economist, in a statement.
The stagnating wood prices in summer also contributed to the increase in construction activity. After hitting a record high of $ 1,670.50 per thousand board feet on May 7, it ended at $ 737.40 in June and fell to $ 621.20 on the last day of July.
Increased housing construction activity can help alleviate the ongoing inventory crisis and is in line with the Biden government's new mandate to add 100,000 affordable housing units over the next three years. In addition, the Federal Housing Finance Agency increased the annual home tax exemption limit for Fannie Mae and Freddie Mac from $ 500 million to $ 850 million.
"The Mortgage Banker Association strongly supports the administration's efforts to increase housing supply by promoting the construction and renovation of affordable apartments and houses for renters and first-time buyers," MBA President and CEO Bob Broeksmit said in a statement following the announcements Lack of supply is a huge problem and the HUD and FHFA should administratively do what they can while Congress considers larger initiatives. "