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Residential construction nudged up in October

Posted on Wednesday, December 2, 2015 at 4:25:17 PM

The U.S. Census Bureau announced on Tuesday that construction spending during October 2015 was estimated at a seasonally adjusted annual rate of $1.1 billion, or 1 percent above where it was in September. Residential construction was at an SAAR of $399 billion in October, also up 1 percent from September's revised rate.

Despite the small gains in October, 2015 has been a great year for new construction. Through the first 10 months of the year, construction spending overall amounted to a little more than $888 billion, or 10.7 percent above the $802 billion spent in the same period in 2014.

While construction has been booming as consumers seek new homes, sentiment among U.S. homebuilders actually fell slightly last month. According to the National Association of Home Builders/Wells Fargo Market Index, builder confidence slid three points to 62 in November. Any measure above 50 is considered positive.

"Even with this month's drop, builder confidence has remained in the 60s for six straight months - a sign that the single-family housing market is making long-term headway," said Tom Woods, NAHB's chairman. "However, our members continue to voice concerns about the availability of lots and labor."

Housing starts, while improving, have remained relatively low. Instead, homeowners appear to favor remodeling with home improvement financing. Home improvement retailers, like Home Depot, have seen better quarterly earnings as consumers pursue remodeling tools and resources.