US construction spending, propelled by gains in homebuilding, increased for the third consecutive month in June, the Commerce Department reported Wednesday.
Construction spending rose 0.4 percent in June after an upwardly revised 1.6 percent uptick in May that was the biggest one-month increase since December, The Associated Press reported. The June boost nudged spending to a seasonally adjusted annual rate of $842.1 billion, 12.9 perent higher than the 12-year low in February 2011.
Spending on residential construction reached an annual rate of $265.6 billion, a 1.3 percent increase. In comparison, spending on private nonresidential developments climbed 0.1 percent to an annual rate of $302.3 billion, after larger increases over the past three months. Office and hotel construction spending rose in June but spending in the category that includes shopping centers fell.
The Commerce Department data comes in light of the Case-Shiller Home Price Index released earlier this week, showing monthly gains in all of the 20 cities studied.
Bolstered by demand from homebuyers, builders began construction on the most new homes in four years in June. Homebuilder confidence was at a five-year high in July, as cheaper mortgage rates and lower home prices enticed buyers.