Construction spending reached a seasonally adjusted annual rate of about $2.21 trillion in May, rising a slight 0.1% from April’s revised estimate of $2.207 trillion, according to the U.S. Census Bureau.

Home building, however, remained weak, helping to drive May construction spending down 1.5% from one year ago, when spending reached an annual rate of $2.24 trillion. Some reports cited the impact of the war in Iran as partly responsible for reducing construction spending this year as the industry reacted to higher interest rates, gas prices and inflation.

The National Association of Home Builders reported in June that overall housing starts decreased 15.4% in May to a seasonally adjusted annual rate of 1.18 million units. Single-family starts decreased 1.9% month over month, and 6.7% when compared to one year ago.

But the real impact was felt in multifamily properties, including condominiums and apartment buildings, which saw May starts decrease 40.2% month over month and 14.2% from May 2025.

Construction spending during the first five months of the year reached $858.4 billion, a decrease of 2.7% from the same period in 2025. Private construction, which includes home building, reached a seasonally adjusted annual rate of about $1.67 trillion in May, virtually unchanged from April.

Residential construction was at a seasonally adjusted annual rate of $930 billion, an increase of 0.3% from the revised estimates for April. Nonresidential construction clocked in at $738.7 billion in May, a decrease of 0.3% from the revised April estimate of $741.3 billion.

Within the residential sector, Spacial CEO Maor Greenberg noted in commentary shared with Scotsman Guide that while overall residential outlays were basically flat for the month, a growing gap is emerging in single-family spending, which was down 4% year over year in May.

“In April, that gap was closer to 3%,” observed Greenberg, whose engineering firm specializes in structural plans for residential construction. “So it is widening, and single-family is a forward-looking indicator. If there are fewer starts now, there will be fewer completions into fall.”

Public construction during May rose 0.5% month over month to an annual rate of $541.2 billion, up from April’s estimate of $538.6 billion.

Educational construction was at a seasonally adjusted annual rate of $113.4 billion, an increase of 0.6% from April levels. Highway construction reached $150.6 billion, 0.6% above April’s revised levels.