Data Center Construction Hits Record $75B Pace as Housing Stalls

Construction spending on data centers hit a seasonally adjusted annual rate of $75 billion in July, up 57% from a year earlier, according to Census Bureau construction-spending data. Over the same period, private residential construction fell 7.3% year over year and total private nonresidential construction fell 3.3%, the clearest sign yet in the government’s own numbers that capital is leaving housing and general commercial building and moving into server farms.

Why it matters

For developers and builders reading the market, this is a spending pattern already showing up in the federal government’s construction accounts, not a forecast. The Census Bureau’s private Office category, the bucket that has included data centers alongside general and financial office buildings since the agency began breaking the subcategory out in 2024, rose 21.3% year over year in July to a seasonally adjusted annual rate of $123.3 billion, even as the broader private nonresidential total slipped. One subset of commercial construction, built around server racks, cooling systems and backup power rather than desks and lobbies, is now outgrowing everything else in the private nonresidential column, traditional office space included. For general contractors and subs, the practical read is where the work sits: data center campuses need electricians, mechanical crews and concrete specialists in volumes that residential and conventional office jobs do not, and that demand concentrates in a handful of power-available markets rather than spreading evenly across metros.

The numbers

Private data center construction ran at a $75 billion seasonally adjusted annual rate in July, up 6.2% from June and 57% from July 2025, per construction-spending data the Census Bureau released September 1. Census’s broader Value of Construction Put in Place survey shows the rest of the market moving the other way: private residential construction was $859.0 billion SAAR in July, down 7.3% from July 2025’s $927.1 billion, and total private nonresidential construction was $755.2 billion SAAR, down 3.3% from $781.1 billion a year earlier. Private office construction, the Census category that now houses data centers, was $123.3 billion SAAR in July, up 21.3% from $101.7 billion in July 2025, the only major private category posting a double-digit annual gain.

What’s next

Watch whether the gap widens or narrows when Census releases August figures on October 1. If data center spending keeps compounding near its recent monthly pace while residential and general office spending keep falling, the divergence, already the widest the two categories have shown, will keep pulling contractors, electricians and project financing toward the narrower set of markets with power headroom to host the next campus. Follow ongoing coverage in data centers.