Information-processing investment overtakes US housing by $4 billion in the second quarter

The crossing is $4 billion wide on a housing line of $748 billion, about half a percent ^[10]. Two moves closed it. Residential investment sits 18% below its early-2021 peak, which puts that peak near $912 billion and the drop at roughly $164 billion ^[11]. Information processing equipment climbed 51% over the same span from a base near $498 billion, a gain of about $254 billion ^[12]. Of the $418 billion that closed the gap, 61% came from the rise in equipment and 39% from the fall in housing ^[13].

The two big numbers in this story measure different things. S&P Global projects $870 billion of capital spending in 2026 across Alphabet, Amazon, Microsoft, Meta, Oracle and SpaceX, and more than $1.3 trillion in 2027 against $470 billion in 2025, which is 2.8 times the 2025 figure inside two years ^[6][22]. The 2026 projection alone runs $118 billion above the BEA's entire information processing equipment line ^[21]. One is six companies' total capital expenditure, one of the six being SpaceX; the other is inflation-adjusted equipment investment for the whole US economy ^[6][2].

Housing investment responds to the 30-year mortgage rate, now near 7% with the 10-year Treasury yield at its highest since 2007 ^[14]. Shapiro noted that residential is the more rate-sensitive of the two, and that AI spending has held up even as the buyers moved from cash piles toward debt ^[5]. Alphabet reported negative cash flow earlier this year ^[15]. Treasury Secretary Scott Bessent said of the borrowing: "We are also seeing big corporate issuance. And a lot of that corporate issuance, I would say, is almost yield-agnostic, because the build-out for AI, the returns on that, the companies believe they're going to be so high. They don't really care what they're paying" ^[9].

S&P's account of the same issuance is colder. Capex is growing faster than revenue, and the build-out could leave overcapacity if demand does not arrive ^[7]. The firm expects operating cash flow across the six to be collectively negative in 2026 and 2027, with revenue accelerating and capex flattening in 2028 ^[8].

On the housing side, August starts fell 2.6% to an annualized 1.275 million, led by multifamily, and permits fell even though single-family starts rose ^[17]. The National Association of Home Builders reported builder sentiment at its lowest level in a year ^[18]. "The big picture remains that elevated and rising borrowing costs are holding developers back, supporting our view that the downward trend in housing starts has further to run," Capital Economics wrote in a recent note ^[19].

So the marginal dollar of US investment growth comes from a handful of capital budgets that, on S&P's own forecast, operations will not cover for two years ^[8]. In my view that relocates the cyclical sensitivity, because credit spreads and issuance windows reprice faster than mortgage rates feed through to starts. A 10-year yield falling back from its 2007 highs would restart housing from the bottom ^[14]. S&P's 2028 flattening would end the crossover from the top ^[8]. And $4 billion on a quarterly estimate can vanish in a revision ^[10]. Permitting answers to neither: in an NBC News poll, 64% of registered voters said they would be less likely to support a candidate who favors building a data center in their community ^[16].