Economic research

construction spending – Economic Research

September 3, 2021

  • To keep up with the rapid changes COVID-19 is causing in the economy and housing market, the economics team at® provides a weekly blog and video update on relevant real estate and economic information you need to know. to navigate the housing market. in these difficult times.
  • This week, Economic Research Director George Ratiu talks about the latest economic and housing indicators, starting with gains in new manufacturing orders and production. It continues with the impact of the global semiconductor bottleneck on sales of new cars and light trucks. He also points to the drop in unemployment insurance claims which have reached a pandemic low. It continues with weaker than expected employment growth and the impact on consumer confidence.
  • George covers housing market indicators that show movement towards normalization, starting with higher construction spending data. He talks about’s August housing data (released by chief economics officer Sabrina Speianu) that shows growth in smaller, more affordable homes, and complements that with more recent weekly numbers (released by l Chief Economist Danielle Hale) pointing to moderating price appreciation. , signs of positive change for homebuyers.
  • George also highlights this week’s mortgage rates, and he concludes with pending home sales, which have retreated as consumers have embraced summer and vacation travel.
  • For more real-time updates, follow the® economics team on Twitter: @rdc_economics.


  • I’m George Ratiu, Head of Economic Research at®.
  • It’s been an impactful week, as Hurricane Ida made landfall in Louisiana, causing major flooding and devastation across large swaths of the country. While the human toll was immediate, the economic toll will take time to calculate.
  • Against this backdrop, the economy and real estate markets continue to move towards a new normal.
  • The manufacturing sector expanded in August as new orders and production rose. However, US companies are still grappling with global supply bottlenecks and labor issues.
  • Speaking of supply issues, some automakers have had to halt production at their factories due to the global shortage of semiconductors. Auto dealers only have about 23 days of inventory on lots, 27 less than in 2020. In turn, sales of new cars and vans were well below expectations in August.
  • In a twist of good news, jobless claims fell to the lowest number since March 14, 2020, just as the pandemic pushed the country into lockdowns.
  • Meanwhile, August employment rose, but the number of new jobs came in well below expectations as rising delta variant cases took their toll. The overall unemployment rate fell to 5.2%.
  • Even with improvements, economic uncertainty has cast a large shadow over consumer confidence. The Conference Board index for August fell to a 6-month low. We are encountering headwinds at the end of the summer.
  • However, real estate markets are leading the way to normalization as construction spending increased in July while lumber prices declined. Residential construction was the sole driver of growth during the month, while commercial projects weakened, notably offices. With single-family construction up 47% from a year ago, more inventory can be expected in the months ahead.
  • Supply is increasing not only for new homes, but also for existing homes. August housing data from® showed that 432,000 homeowners have decided to put their homes up for sale. Above all, these newly listed homes are smaller and more affordable, which is good news for first-time buyers.
  • Greater supply was also reflected in recent weekly figures from Price gains are now decidedly down in single-digit territory, putting the overheated market of the past year in the rearview mirror.
  • We are entering a golden window of opportunity for sellers and buyers over the next few months as growing inventory and slowing prices combine with favorable three-way market mortgage rates.
  • Meanwhile, contract signings in July reflected a period when Americans were enjoying sunshine and well-deserved vacations, with pending sales declining in all regions except the West.
  • Heading into the colder months, stay safe, spend time with your family, and keep an eye on the markets with new research from
  • Find your market trends and download the data at or follow us on Twitter for real-time updates.

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