Residential construction expands in August, even as overall construction numbers drop
Construction spending dropped 0.6 in August from the previous month, although it is up 6.5 percent on a year-over-year basis. Overall, residential construction spending showed the most strength, improving 0.9 percent. The improvement of the residential construction spending was somewhat expected given the current state of the real estate market.
Prolonged investor interest in discounted distressed properties has steadily removed foreclosure and short sale properties from the market, and improved owner-occupied demand has helped spur a turnaround in home prices.
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As properties leave the market, residential real estate supply has steadily declined. Since hitting a peak of 18 months of supply, the real estate market currently hovers at the “healthy market” level of six months.
[Related: The challenging real estate market]
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