a worker walks on the roof of a new home under construction in carlsbad california september 22 2014 reutersmike blakefile photo washington aug 1 reuters  us construction spending tumbled in june as outlays on singlefamily homebuilding declined sharply amid rising mortgage rates the commerce department said on monday that construction spending dropped 11 in june after gaining 01 in may economists polled by reuters had forecast construction spending would rise 01 construction spending increased 83 on a yearonyear basis in june spending on private construction projects decreased 13 after increasing 02 in may investment in residential construction dropped 16 with spending on singlefamily projects plunging 31 outlays on multifamily housing projects increased 04 the housing market is cooling as higher mortgage rates reduce affordability for buyers residential spending contracted at its steepest pace in two years in the second quarter that contributed to gross domestic product declining at an annualized rate of 09 last quarter after shrinking at a 16 pace in the januarymarch quarter the federal reserve last week raised its policy rate by another threequarters of a percentage point it has now hiked that rate by 225 basis points since march investment in private nonresidential structures like gas and oil well drilling fell 05 in june outlays on nonresidential structures have declined for five straight quarters spending on public construction projects dropped 05 after falling 07 in may investment in state and local government construction projects slipped 06 while federal government spending increased 12