US construction spending falls 1.9% in September as residential outlays drop 5.5%

The drop wiped out most of August's gain, which the Census Bureau revised to 2.0% from the 0.9% first reported. Spending was 2.7% below September 2025, and the total for January through September ran 2.9% behind the same stretch of last year, according to the report as broken down by investingLive.

Housing did the damage. Private residential spending fell to an annualized $848.8 billion from $898.0 billion in August. New single-family work was flat for the month and 2.4% lower than a year earlier, while multifamily edged up 0.1%, Reuters reported. The news agency put the weakness on renovations, likely held back by high materials costs, and noted that the average 30-year mortgage rate has risen by 125 basis points or more since the US-Israeli war with Iran began in late February, citing Freddie Mac.

Other lines grew. Private nonresidential spending rose 1.1% to $790.6 billion, with power plants up 1.2%. Public construction slipped 0.1% to $546.8 billion: state and local outlays fell 0.3%, federal projects jumped 2.5%, and highways eased 0.3% to $149.2 billion.

The figures measure dollars spent at an annual rate, so they do not separate price increases from changes in the amount of work put in place. They also get revised, as August's number was this month.