Residential construction spending continued to fall in June, according to government estimates published Monday.

The decline came amid a broader slowdown in construction spending in June, which declined 0.1% from May and 3.2% from a year ago to land at about $2.16 trillion, according to the U.S. Census Bureau’s updated figures.

Economists polled by Reuters had forecast a 0.1% monthly rise in total construction spending.

Overall spending on residential construction notched its fourth consecutive month of declines, sliding to a seasonally adjusted annual rate of roughly $889.3 billion to close out the second quarter. That reflects a 0.3% decrease from May and roughly 4.7% decline from the $933.2 billion posted a year ago.

Home building activity has disappointed through the first half of 2026 as elevated mortgage rates and home prices have led to slow sales, putting margin pressures on builders who have pulled back on new single-family starts and permitting activity.

After starting the year around 6%, mortgage rates for typical 30-year home loans have surged since the start of the Iran war in late February, spending the past 11 weeks above 6.5%, according to Mortgage Bankers Association data.

Across the private sector, which represents the bulk of residential construction spending, the annual pace of single-family investments in June declined 0.6% from May and approximately 3.3% from year-ago levels, underscoring persistent softness.

The annual pace of single-family spending fell to about $408.8 billion in June from roughly $423 billion a year ago.

Multifamily construction activity has remained resilient in 2026, however, as high mortgage rates and home prices have made homebuying inaccessible to many typical earners, supporting rental demand.

Nevertheless, new multifamily investments declined 0.7% over the month in June to about $114.8 billion, which is 1.5% lower than a year ago.

Elevated financing costs and broader macroeconomic uncertainty linked to Trump administration tariffs and the ongoing Iran war have caused sentiment among builders to plummet in recent months, according to the National Association of Home Builders.

The pace of new-home sales rose 1.6% from May to June, the Census Bureau reported in late July, though year-to-date sales activity is still 5.2% lower than 2025 levels.

Economic data released by the Bureau of Economic Analysis last month showed housing’s share of the U.S. economy fell to its lowest level since 2019, at 15.8% of gross domestic product in the second quarter.