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Construction spending climbs in February

Posted by Mehran Aram on Wed, Apr 3, 2019 @ 05:04 AM

Following January’s surprising surge of 2.5 percent, U.S. construction spending rose yet again in February, this time by a more modest one percent. According to data released by the U.S. Department of Commerce, total construction spending in February was $1.32 trillion, the highest level since May 2018.

Driving the increases over the past few months was a spike in residential construction spending. The boost in new home building shows an attempt to meet anticipated demand as the spring-home buying season kicks off with falling mortgage rates.

Mortgage rates have dropped nearly a full percentage point since last fall. Today, conforming no-point 30-year fixed mortgage rates are averaging 4.125 percent, 15-year rates are near 3.625 percent and the 5-year ARM is averaging 4.00 percent.

Do you have a question for Real Estate & Mortgage Analyst Mehran Aram? Submit your queries about a home purchase, refinance, or reverse mortgage via Aramco.Biz, social media (#AramcoReport), or over the phone at (866) 381-8888 and your questions may be featured in an upcoming article.

Topics: Construction, U.S. Department of Commerce, Mortgage rates, Home Building, Construction Spending, U.S. Construction

Sharp decline in construction spending ends 2018

Posted by Mehran Aram on Wed, Mar 6, 2019 @ 07:03 AM

After being delayed for several weeks because of the partial government shutdown, the Commerce Department on Monday released figures for construction spending for the month of December. Construction spending fell an unexpected 0.6 percent in the tail end of 2018. This is in contrast to a 0.2 percent increase forecast by economists in a polled conducted by Reuters.

Spending dropped in both the private and public sectors. Investment in private residential project shrank 1.4 percent in December after having risen 3.4 percent in November. Builders are blaming more expensive material costs and a shortage of both labor and land for the declines.

Still, construction spending for December was 1.6 percent higher on a year-over-year basis. It rose 4.1 percent overall in 2018, however this rate of increase is the slowest recorded since 2011.

Today, conforming no-point 30-year fixed mortgage rates are averaging 4.25 percent, 15-year rates are near 3.75 percent and the 5-year ARM is averaging 4.25 percent.

Do you have a question for Real Estate & Mortgage Analyst Mehran Aram? Submit your queries about a home purchase, refinance, or reverse mortgage via Aramco.Biz, social media (#AramcoReport), or over the phone at (866) 381-8888 and your questions may be featured in an upcoming article.

Topics: U.S. Department of Commerce, Mortgage rates, Construction Spending