Residential construction fell 0.3 percent in August to an annual rate of $238.5 billion, the Commerce Department reported Friday. This marks the fourth consecutive month that residential spending has dropped. Spending temporarily rose earlier in the year, as buyers took advantage of the homebuyer tax credit. But home construction has stagnated since the tax credit’s April 30 expiration.
However, overall construction spending rose 0.4 percent in August, thanks to a big increase in government building projects. Government projects jumped 2.5 percent, while private construction fell to its lowest level in 12 years.
As the economy continues to lag, banks have tightened lending standards and made it harder for builders to get financing for new projects.