Residential construction spending fell 5.5% in September, office spending rose 5.5%
Census data show the September drop came from work on existing homes, while spending on new houses and apartments held flat.
By Alex Pham · · 3 min read
U.S. construction spending ran at a seasonally adjusted annual rate of $2,186.1 billion in September, 1.9% below a revised August [1]. Private residential spending fell 5.5%, while private nonresidential spending rose 1.1% to $790.6 billion [1].
Through the first nine months, spending totaled $1,649.6 billion, 2.9% less than in the same stretch of 2025 [1].
Work on existing homes drove the whole residential drop
Spending on new single-family homes and new apartments barely changed from August [1]. The rest of private residential spending is improvements to existing homes, which the summary table does not list on its own, and by our math it fell about 13% in a month [1].
| Private residential, annual rate | Sept 2025 | Aug 2026 (revised) | Sept 2026 | Change vs. Aug |
|---|---|---|---|---|
| New single-family | $413.2B | $403.5B | $403.4B | 0.0% |
| New multifamily | $116.1B | $115.8B | $115.9B | +0.1% |
| Improvements (our calculation) | $401.9B | $378.7B | $329.5B | −13.0% |
| Total | $931.2B | $898.0B | $848.8B | −5.5% |
September’s decline is measured against an August figure Census revised upward
Census first put August private residential spending at $882.3 billion [2], then revised it to $898.0 billion [1]. The first August estimate showed total spending up 0.9% from July, a change Census said was not statistically significant [2].
Office and power construction are growing while factory construction shrinks
Private office construction was 39.5% above a year earlier [1]. The Census release does not break out data centers, but Fed Governor Lisa Cook said in September that data-center investment draws on “construction labor and energy” [3].
Public construction barely moved at $546.8 billion, down 0.1% from August and up 1.0% from a year earlier [1].
How to use this
For remodelers and fix-and-flip investors
- Get at least two bids on every renovation scope and ask each contractor for a start date in writing. We calculate that improvement spending ran about 18% below September 2025 [1], which could leave remodeling crews with open calendars.
- Budget the carrying cost of the loan before you budget the finishes. At the June median fix-and-flip rate of 9.99% plus 0.98 points [4], we calculate that a $300,000 loan held for six months costs about $14,985 in interest and $2,940 in points.
For single-family and multifamily builders
- Ask your framing, electrical and concrete subcontractors whether they are also bidding commercial work, and lock labor pricing in the contract. Office and power spending together ran at $317.3 billion in September against $257.5 billion a year earlier, a rise we calculate at 23% [1].
- Use the steady month-to-month new-construction numbers as a baseline when you negotiate materials and trade pricing for 2027. New single-family spending was 2.4% below September 2025 and new multifamily was 0.2% below [1].
For investors and lenders
- Wait for the revised figure before changing a construction-lending forecast on one month of data. August’s private residential estimate moved up by $15.7 billion between the first and second reads, we calculate from the two releases [1][2].
- Compare your loan book’s growth with the 2.9% year-to-date decline in total spending [1]. A residential pipeline growing faster than that could mean you are taking share or taking projects other lenders passed on, so review recent approvals with that in mind.
This is market commentary, not investment advice.
Sources
- [1]U.S. Census Bureau, Monthly Construction Spending, September 2026, Nov 2, 2026.
- [2]U.S. Census Bureau, Monthly Construction Spending, August 2026, Oct 1, 2026.
- [3]Federal Reserve Board, Cook, An Update on AI and the Economy, Sep 28, 2026.
- [4]National Private Lenders Association, Private Lending Market Report, June 2026, Jun 30, 2026.
