US construction spending edged up in May as higher mortgage rates constrained homebuilding. The Commerce Department’s Census Bureau said that construction spending rose 0.1% after a downwardly revised 0.3% increase in April.
Construction Spending Details
Spending on private construction projects was unchanged after rising 0.3% in the prior month. Investment in residential construction increased 0.3%, reflecting renovations. However, spending on new single-family housing projects dropped 0.1% and tumbled 4.0% year-on-year in May.
The U.S.-Israeli war with Iran boosted oil prices, driving up inflation and mortgage rates. The average rate on the popular 30-year fixed-rate mortgage has increased by about 50 basis points since the conflict started at the end of February.
Investment in public construction projects increased 0.5% after a similar gain in April. State and local government construction spending rose 0.4% in May, while outlays on federal government projects jumped 1.3%, likely boosted by the building of detention centers as part of an immigration crackdown.
Original reporting: Appleton, WI News Feed (HLL/CB) — read the source article.
