In March 2025, private residential construction spending in the U.S. declined by 0.4%, marking the end of a five-month growth streak. This downturn was primarily driven by a 1.2% decrease in home improvement expenditures, reflecting subdued remodeling activity in the first quarter. Despite this monthly dip, overall spending remained 2.8% higher than in March 2024, indicating some resilience in the housing market. Single-family construction spending saw a modest 0.1% increase for the month but was still 0.8% lower compared to the previous year. Multifamily construction spending remained flat in March and was down 12.1% year-over-year, continuing a downward trend that began in December 2023 .
The broader construction sector faced additional challenges, with total U.S. construction spending falling by 0.5% in March, contrary to expectations of a 0.2% increase. Private construction spending decreased by 0.6%, and public construction spending dipped by 0.2%. High mortgage rates and new tariffs, including a 145% duty on Chinese imports and a 25% levy on foreign steel and aluminum, have increased home construction costs by approximately $10,900 per unit, according to the National Association of Home Builders . These economic pressures are expected to delay the recovery of the U.S. residential construction market, with industry leaders like CRH CEO Jim Mintern suggesting that a significant decline in mortgage interest rates is essential to revitalize market activity .
