Private Residential Construction Up in October

By:: Kara Johnson | December 02, 2009

Private residential construction was up in October, following a summer season in which home building rates fell to their lowest levels in 14 years, according to new data from the Commerce Department.

The value of residential construction put in place in October was up 4.4 percent from September, to a seasonally adjusted annual rate of $250.3 billion. Overall U.S. construction spending remained essentially unchanged at an annual rate of $910.8 billion.

Private residential construction rates have been fluctuating in recent months after bottoming out at an annual rate of $237.0 billion in June, their lowest level since December 1995. Prior to last June, residential construction had been steadily declining over the previous three years since hitting a peak $676.4 billion in March 2006, when time home values were also hitting their high points.

The fluctuation in private construction rates after last June’s low suggests that the homebuilding market may have bottomed out, but the increase is too small to say whether a recovery is underway. The Commerce Department says it can take from two to eight months for a trend in construction data to be established.

The current private construction rate still represents a decrease of nearly one-quarter from only one year ago, when the October 2008 annual rate was reported at $327.7 billion.

The rate of total construction put in place remains near a six-year low, having bottomed out in September at $910.3 billion, its lowest point since August 2003. That figure is 14.4 percent below the October 2008 annual rate of $1.064.1 billion.

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