Construction Spending Continues to Slide

Construction spending in January fell to its lowest point in five months, thanks largely to weak private investment – a less-than-optimistic sign for housing market hopefuls.

January construction spending slipped 0.7 percent to a seasonally adjusted rate of $791.8 billion, down from $797.6 billion in December, according to the Commerce Department. Overall, private construction spending was down 1.2 percent as nonresidential building plummeted 6.9 percent to $244.44 billion -- its lowest level since August 2004, according to Reuters.

Conversely, residential investment actually grew by 5.3 percent. But the uptick could be due in part to an increase in multifamily home construction – a harbinger of growing demand for rentals. Not exactly the most comforting thought for homeowners. In context, despite the month-over-month growth in residential investment, home construction is still down 7.7 percent from January 2010.

For more on the health of the housing market, check out Radar Logic CEO Michael Feder's expert take on the residential market:

Housing Market Data Doesn't Tell the Whole Story