The U.S. Census Bureau of the Department of Commerce announced that construction spending during November 2018 was estimated at a seasonally adjusted annual rate of $1.3 trillion, rising 0.8% from the revised October estimate of $1.29 trillion.
Notably, November’s spending is 3.4% above the November 2017 estimate of $1.26 trillion.
Spending on private construction was at a seasonally adjusted annual rate of $993.4 billion, 1.3% above the revised October estimate of $980.4 billion.
Of that, residential construction spending was at a seasonally adjusted annual rate of $524.5 billion in November, which is 3.5% above the revised October estimate of $542.2 billion.
Despite increases in construction spending, November’s Housing Market Index revealed affordability concerns weekend homebuilders faith in the market, according to the National Association of Home Builders and Wells Fargo.
“Builders report that they continue to see signs of consumer demand for new homes but that customers are taking a pause due to concerns over rising interest rates and home prices,” NAHB Chairman Randy Noel said in statement regarding November’s index.
That being said, homebuilder confidence has since strengthened in January, as the latest Housing Market Index indicates homebuilder confidence rose to 58 points.
Noel attributes January’s boost to improvements made in the U.S. economy.
“The gradual decline in mortgage rates in recent weeks helped to sustain builder sentiment,” Noel said. “Low unemployment, solid job growth and favorable demographics should support housing demand in the coming months.”