Construction Spending Increases as Demand Drops in June

Home building spending increases in JuneAccording to recent Commerce Department figures, construction spending in the U.S. increased in June to the highest level is almost three years. The .4 percent gain pushes the value of all projects up to $842 billion at an annual rate.
In addition, housing starts climbed 6.9 in June to a 760,000 annual pace, the fastest pace in almost four years. Housing outlays also rose 1.3 percent to bring its total value to $266 billion.
Other home building industry indicators did not fare as well. Unexpectedly, demand for new U.S. homes dropped 8.4 percent during June, and demand for existing homes dropped 5.4 percent. Spending on public construction also dipped 1.6 percent even as expenditures by state and local governments climbed.
However, even with a mixed picture for building new homes in Chicago and across the nation in general, borrowers are still seeing record low rates. the average rate for a 30-year fixed mortgage was down to 3.49 percent at the end of July, the lowest rate on record since 1971. Additionally, the average rate for a 15-year fixed mortgage dropped to a new record of 2.8 percent.
As the housing market continues its slow, steady recovery, builders are gearing up for expected higher demand, which means there is plenty of new Chicago real estate on the horizon.