New Home Construction Spending Up 40 Percent Since Recession

After the housing market hit bottom, less U.S. and Chicago new homes were built as homeowners instead began improving the ones they already had.
It seems that trend may have ended.
Chicago new home construction risingU.S. construction spending from June to July fell by 0.9 percent, the Commerce Department said Tuesday. After three straight months of gains, the decrease in spending was the largest drop in a year.
But when you break down the numbers, they’re mostly positive on the residential end. July’s decline was the result of a whopping 5.5 percent drop in home improvement spending. Construction spending on private non-residential projects fell 0.9 percent and spending on government projects fell 0.4 percent.
But spending on new U.S. single-family homes in July was up 1.5 percent to mark the fourth straight month of improvements and the second-highest monthly tally since the start of 2009. In fact, according to the National Association of Home Builders, since bottoming out in the second quarter of 2009, the nominal dollar value of spending on new homes has increased 40 percent.
Spending on apartment buildings rose in July for the 10th straight month, increasing 2.8 percent. Since its low point in August 2010, spending on new multifamily properties has skyrocketed 68 percent.
And, during the first seven months of this year, construction spending amounted to $464.4 billion, which is 9.3 percent higher than it was during the same time period in 2011.
Still, construction spending is still way below historical norms, and activity is about half of what economists consider to be healthy. In fact, says the NAHB, the July 2012 total is just 42 percent of the residential construction spending total in July 2003.
But for now, spending on new homes is up and, according to the NAHB, “While the recovery in home building varies from location to location, the overall positive trend is expected to continue into 2013.”