After single-family construction spending declined more than 5% over the year in January to a revised annual rate of around $412 billion, government data released Thursday indicates private investments rebounded in March to their highest levels in four months.
New private single-family spending rose to an annual pace of more than $417 billion that month, a modest 2.7% bounce from February — but still 4.2% lower than single-family construction spending one year ago.
Total construction spending (private and public) increased to an annual pace of $2.186 trillion, 0.6% higher than February and 1.6% higher than a year ago, according to the U.S. Census Bureau’s latest figures. Roughly $941.7 billion of that annualized projection flowed into residential projects, roughly 3.5% higher year over year.
Despite the increases, Spacial CEO Maor Greenberg flagged concerning trends.
“That sounds fine, but it isn’t,” Greenberg said in commentary shared with Scotsman Guide. “Total spending has been flat for two years, and completions are down, while per-unit costs keep climbing. We’re stuck in a bad feedback loop: High interest rates lead to less construction, and less construction means less supply.”
Greenberg, who co-founded Spacial, an AI-based engineering platform specializing in structural plans for residential construction, believes the headline numbers mask more worrying developments in builder economics.
“Builders are actually spending more per home and finishing fewer homes,” he remarked. “Even if total construction spending looks stable, the unit economics are not. That’s a bad combination for margins.”
Revised government figures show total private residential construction spending of around $909.5 billion in 2025 lagged 2024 totals by about 2.2%.
The contraction was more pronounced in private multifamily spending, which fell 8.3% annually, than in private single-family construction spending, which declined 3.2% in 2025 from the prior year.
Private residential construction spending, which includes single-family and multifamily projects, increased to a seasonally adjusted annual pace of $929.7 billion in March, a 1.7% rise from February and 3.6% growth from a year ago.
Private spending on multifamily construction grew at a more moderate pace than its single-family counterpart, with multifamily investments increasing 0.3% monthly and 0.5% annually.
Amid growing inflationary concerns in March from the burgeoning Iran war, then in its first month, single-family housing starts rose nearly 10% above February levels, according to government data released at the end of April. Single-family permits slid 3.8% from February, however, to land 7.4% below year-ago levels.
New-home sales and new-home purchase mortgage applications also surged in March, according to the Mortgage Bankers Association (MBA).
Meanwhile, commercial mortgage lending data published Thursday by the MBA showed multifamily loan originations declined overall in the first quarter from the previous quarter, but revealed year-over-year momentum fueling optimism.
