Construction spending in March retreated from a record high set in February, according to new data released this week by the U.S. Department of Commerce. Nationwide, spending on construction projects declined by a seasonally adjusted 0.2 percent in March, a stark difference from the 0.5 percent climb economists predicted in a survey by The Wall Street Journal.
The $1.221 trillion annual rate in construction costs set in February surpassed an 11-year record. The figure, released monthly by the Commerce Department, is a barometer for overall economic performance in a variety of sectors. During the financial crises in 2008-09, spending on new home building experienced a steep decline but has slowly recovered since.
Increases in home construction expenditures, even as overall building construction is in decline, indicate that builders are working to address the ongoing housing shortage taking place across the country. Limited inventory is continually driving home prices higher.
Meanwhile, conforming no-point 30-year fixed mortgage rates are averaging 4.125 percent while 15-year rates are near 3.25 percent.
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