The National Association of Home Builders (NAHB) reported on the most recent NAHB/Wells Fargo Housing Market Index (HMI), noting that private residential construction spending inched up 0.8% in August. Association officials point out that the increase is part of “continuing steady growth” since June 2025, attributing that primarily to increased spending on multifamily construction and home remodeling.
But total residential spending was 2% lower than a year ago, as the housing sector continues to navigate the economic uncertainty stemming from tariff concerns and elevated mortgage rates, NAHB officials add.
According to the latest U.S. Census report, spending on single-family home construction slipped 0.4% in August, in line with the soft builder sentiment measured that same month. Compared to a year ago, single-family home construction spending fell 1.1%. Improvement spending (remodeling) posted a solid 8.2% gain for the month, while remaining 1.3% lower than in August 2024.
Extrapolating from the information, NAHB officials opine that the remodeling sector continues to show resilience, supported by strong homeowner equity and persistent demand for home improvements.
That’s what Lowe’s CEO Marvin Ellison sees happening, too. Ellison told Yahoo Finance writer Brooke DiPalma, that “Americans [have] ‘significant equity’ yet [feel] sidelined from buying a new home due to rates,” leading him to believe “renovations will be on the rise next year.” That may be why Lowe’s stock is up nearly 6%.
“We expect homeowners to start, at some point, to tap into these … home equity lines of credit to start to finance larger, more discretionary home improvement projects, because they’re going to be reluctant to give up those sub-4%, sub-3%, 30-year fixed mortgage rates,” he told DiPalma.
Homeowners, Ellison said, have low mortgage rates but “hate their kitchen … need an extra garage … an extra bathroom, they need a modernized environment.”
Meanwhile, NAHB reports that multifamily construction spending rose 0.2% in August, marking a pause in the downward trend that began in mid-2023. Compared to a year earlier, multifamily spending was down 7.1%.