US Residential Construction Spending Fell 7.3% Over the Year to $859 Billion in July

US private residential construction spending ran at an annualised $859bn in July, down 1.3% on the month and 7.3% on the year, Census Bureau figures show.

Private residential construction spending in the United States ran at an annualised $859bn in July 2026, down 1.3% from June and 7.3% below a year earlier, according to Census Bureau figures released on 1 September. Total construction spending across all categories reached $2.16 trillion, itself 3.8% lower than July 2025 — meaning residential building is contracting roughly twice as fast as construction as a whole.

Public Building Retreated Too

Total residential construction, public and private combined, came to $871.2bn on an annualised basis. The public share is small at $12.2bn and fell 5.2% over the year, so no public programme is cushioning the private decline; both are pointing down at once. Where several European governments have expanded public housing programmes as private activity softened, the United States is not currently running that kind of offset at any meaningful scale.

Spending Is a Dollar Measure, Not a Unit Count

One caveat belongs on any construction spending series: it counts dollars, not homes. Building input costs have risen since 2025, so a 7.3% fall in money put in place implies a larger fall in physical activity than the headline suggests. The series captures labour, materials and work completed, and it is declining in nominal terms at a time when the inputs those dollars buy have become more expensive.

The Price Side Has Not Broken

Falling construction spend has not fed through to prices. Glopra's United States snapshot shows a national average of about $2,454 per square metre with a 6.71% gross rental yield and prices 2.2% higher over the year on the FHFA index. That is slow growth by the standards of 2021 or 2022, but it is growth, and it sits alongside a pipeline contracting at 7.3%. Less building into a market with positive price momentum is the mechanism by which an affordability problem stops being cyclical and becomes structural.

Two Readings, Both Defensible

Builders pulling back can be read as a rational response to weak demand — a market clearing itself, supply adjusting to what buyers will actually pay. It can equally be read as the opening of the next shortage, since homes not started in 2026 cannot be sold in 2028. Both are consistent with the July data. What separates them is the next few months of the series: stabilisation near $859bn would support the first reading, while continued declines of around 1% a month would support the second.

Sources: US Census Bureau, Construction Spending, July 2026 release, 1 Sep 2026 https://www.census.gov/construction/c30/news.html; Scotsman Guide (Census construction spending analysis), 1 Sep 2026 https://www.scotsmanguide.com/news/residential-construction-spending-falls-in-july/

Market data: United States · Miami