Data centers boom while homebuilding, other construction decline in America

I saw this report hit last week, and it tells me a lot about how off-kilter a lot of our economy is these days.

It's in the monthly construction report that the Census Bureau puts out, and September's numbers were released last week. On the top level, the numbers were bad enough.

Construction spending during September 2026 was estimated at a seasonally adjusted annual rate of $2,186.1 billion, 1.9 percent (±0.7 percent) below the revised August estimate of $2,227.4 billion. The September figure is 2.7 percent (±1.5 percent) below the September 2025 estimate of $2,245.8 billion. During the first nine months of this year, construction spending amounted to $1,649.6 billion, 2.9 percent (±1.0 percent) below the $1,698.6 billion for the same period in 2025.

Spending on private construction was at a seasonally adjusted annual rate of $1,639.3 billion, 2.4 percent (±0.5 percent) below the revised August estimate of $1,680.3 billion. Residential construction was at a seasonally adjusted annual rate of $848.8 billion in September, 5.5 percent (±1.3 percent) below the revised August estimate of $898.0 billion. Nonresidential construction was at a seasonally adjusted annual rate of $790.6 billion in September, 1.1 percent (±0.5 percent) above the revised August estimate of $782.3 billion.

Spending in nonresidential construction was up 1.8% in Sept 2026 vs Sept 2025, but residential construction was down a whopping 8.8% over the same 12 months.

Then dig into the private construction numbers more, and you'll see that the "nonresidential" growth is heavily slanted into one type of building in particular - data centers.

In fact, take out data centers, and the value of construction projects put in place has significantly dropped in the last two years, even as prices have continued to rise.

Then add in the fact that debt used to construct these data centers has been a reason behind rising interest rates in 2026, due to the increasing amount of bonds thrown out on the markets, and it sure seems like data center buildouts are crowding out other forms of construction.

Doesn't seem like a sustainable way to run an economy, does it? Seems like we are well overdue to rebalance things when it comes to what we're building in this country.