U.S. Construction Spending Declines in June 2026 Amid Rising Mortgage Rates

In June 2026, total U.S. construction spending slipped 0.1% month-over-month, according to the Commerce Department’s Census Bureau. The seasonally adjusted annual rate (SAAR) fell to $2,166.5 billion, a decline of 3.2% year-over-year. Private construction contributed the full dip, decreasing 0.1% to a SAAR of $1,622.5 billion. Public construction was essentially flat, with state, local and federal outlays unchanged from May.

Residential Construction Spending Slips as Remodeling Activity Weakens – Eye On Housing

The June decline follows a series of downward revisions to earlier months. May’s construction-spending change was revised from a 0.1% rise to a 0.3% decline, and April’s month-over-month increase of 1.6% was revised to a 10.1% drop. On a year-over-year basis, April’s previously reported 10.0% gain was revised to a 2.6% decline, while May’s 8.1% gain was revised to a 5.5% decline. These adjustments sharpen the view of a broader slowdown that began in early 2024 as higher mortgage rates curbed housing demand.

Residential Construction Spending Slips as Remodeling Activity Weakens – Eye On Housing

• Residential construction: Private residential spending stood at $877.1 billion (SAAR), down 0.3% from May and 4.7% lower than a year earlier. Single-family housing fell 0.6% month-over-month and 3.3% year-over-year; multifamily housing declined 0.7% month-over-month and 1.5% year-over-year.

Reuters

• Nonresidential construction: Overall nonresidential spending rose 0.1% to $1.277 trillion (SAAR). Within private nonresidential categories, office construction increased 2.8% to $115.8 billion, while manufacturing fell 1.2% to $170.3 billion and commercial construction dropped 1.3% to $115.3 billion.

Data center sector drives U.S. nonresidential construction spending growth in June

• Data centers: Construction of data centers surged, posting a 7.0% month-over-month increase and a 45.8% year-over-year rise. Data centers now represent 59.0% of total office-construction spending, up from 45.8% a year earlier.

Residential Construction Spending Slips as Remodeling Activity Weakens – Eye On Housing

No additional policy actions were announced in the release.

Residential Construction Spending Slips as Remodeling Activity Weakens – Eye On Housing

Two outlets reported differing revision magnitudes for April and May. Reuters cited a 0.1% month-over-month decline for May after revision, while EyeonHousing described the same month’s change as a 0.3% decline. Both sources agree on the direction of the revisions but differ on the exact revised percentages, illustrating a gap in the publicly available month-over-month figures.

Residential Construction Spending Slips as Remodeling Activity Weakens – Eye On Housing

• “Through April 2025, private nonresidential construction spending ascended to $806.1 billion on a seasonally adjusted annual rate basis, an all-time high,” — ABC Chief Economist Anirban, said ABC chief

Data center sector drives U.S. nonresidential construction spending growth in June

• “Despite an ongoing data center construction boom, private nonresidential construction spending has declined to a seasonally adjusted annual rate of $745.3 billion since the April 2025 peak, which translates into a decline exceeding 7%,” — Anirban Basu, said ABC chief

Data center sector drives U.S. nonresidential construction spending growth in June