Spending on construction in the US has an unexpected drop in December – ISTOÉ DINHEIRO

Building under construction in California, USA

WASHINGTON (Reuters) – U.S. construction spending unexpectedly fell in December as investment in single-family home construction continued to decline amid higher mortgage rates.

The US Commerce Department said on Wednesday that construction spending fell 0.4% in December. Economists polled by Reuters had forecast construction spending to remain unchanged.

Construction spending rose 7.7% year-on-year in November, and jumped 10.2% in 2022.

Spending on private construction projects decreased by 0.4%. Residential construction investment fell 0.3%, with spending on single-family housing projects down 2.3%. Spending on multi-family housing developments increased 3.2%, driven by strong demand for rental housing.

The Federal Reserve’s fastest cycle of interest rate hikes since the 1980s sent the real estate industry into recession. Residential investment suffered its seventh straight quarterly decline in the fourth quarter, in the longest streak since the collapse of the housing bubble that triggered the Great Recession of 2007-2009.

(By Lucia Mutikani)