Private spending on residential construction in 2025 declined from 2024 levels by roughly $24.3 billion, or 2.6%, according to year-end data released Friday by the U.S. Census Bureau, delayed due to the 43-day government shutdown last fall.
The government’s updated index of monthly construction spending shows residential outlays dipped 1.2% from a seasonally adjusted annual pace of $913.9 billion in October to $902.5 billion in November.
However, the residential sector erased that decline with 1.5% spending growth in December, lifting the annual pace to $916.2 billion. The Census Bureau says its figures exclude rental, vacant and seasonal residential improvements.
“Residential’s modest turnaround at the end of the year was broad-based,” noted Wells Fargo economists Charlie Dougherty and Ali Hajibeigi in commentary released Friday. “Single-family, multifamily and home improvement outlays each notched improvement, consistent with recent indicators (housing permits and building material retail sales) showing similar stabilization.”
The monthly growth in December stemmed from a 1.6% increase in spending on new single-family projects, compared to just 0.1% growth in new multifamily spending. However, single-family spending was 3.6% lower from a year ago in December, while multifamily spending was 2.9% higher.
On an annual basis, the approximately $419.6 billion in new single-family construction spending was 3.1% lower than 2024, while new multifamily spending was down a sharper 8.4%. Publicly funded residential construction totaled around $12.2 billion, a 10% increase year over year.
Overall, the spending report complements separate shutdown-delated reporting from the Census Bureau showing single-family construction slowed measurably last year. Single-family starts declined by 6.9% in 2025, while single-family permits dropped 7.4% and single-family, one-unit completions dipped 0.8% from 2024 levels.
Headwinds facing home builders and investors in new residential construction span elevated financing costs, uncertainty stemming from President Donald Trump’s volatile tariff policies and a costly regulatory burden that home builders consistently say inflates prices for newly built homes.
Meanwhile, as affordability constraints hold back homebuyers and builders, lawmakers in the U.S. Senate and House of Representatives continue to juggle passage of a pair of omnibus housing reform bills, each designed to broadly expand liquidity and cut regulation to expand housing supply.
A supply shortfall, housing economists broadly agree, has structurally enabled rapid home price gains following the 2008 financial crisis era. Combined with elevated mortgage rates compared to recent years, many typical homebuyers have walked a narrow path to home purchase affordability, requiring builders to leverage sales incentives aggressively last year to unload completed inventory.
While home builders’ six-month sales outlook weakened to start off 2026, separate recently released Census Bureau data suggests year-over-year sales momentum continued for newly built homes through the end of 2025, as market-level trends also point to some stabilization in the sector.
Reporting from Realtor.com has underscored how new homes comprised just 18% of listings share at the end of 2025, compared to a 24% share of total listings at the end of 2023.
The declining share of new homes among total single-family inventory has resulted in newly built homes reclaiming a higher median price per square foot, according to the listings platform, as expanding levels of resale inventory have pushed down values for existing homes.
Total construction spending in 2025 came in at just above $2.164 trillion, roughly 1.4% lower than 2024 spending levels. Nonresidential private construction totaled $742.4 billion, about 3.1% below the $766.5 billion recorded in 2024, the Census Bureau reported.
