US construction spending fell 1.9% month over month in September 2026 to a seasonally adjusted annual rate of $2,186.1 billion, nearly reversing August's upwardly revised 2.0% increase. The decline was sharper than economists' 0.3% growth forecast, while an earlier account had cited a 0.4% increase. Spending fell 2.7% from a year earlier. Private construction spending decreased 2.4%, led by a 5.5% drop in residential investment as high materials costs weighed on renovation activity. Single-family housing outlays were unchanged during the month but declined 2.4% year over year, while multifamily spending rose 0.1%. Private nonresidential construction increased 1.1%, including a 1.2% gain in power-plant spending. Public construction spending slipped 0.1%, with state and local outlays down 0.3% and federal project spending up 2.5%. Residential investment returned to contraction in the third quarter as the US-Israeli war with Iran pushed mortgage rates higher; the average 30-year fixed mortgage rate rose at least 125 basis points from late February, Freddie Mac data showed. The figures were reported on November 2.