Housing Share of GDP: 15.5% in 1st Quarter of 2014 & Showing Signs of Continued Growth


Per NAHB’s Article by Robert Dietz: Housing’s Share of GDP, including RFI, is at its 4th Highest Point Since the Great Recession. Housing Market is Expected to Continue to Grow in 2014, says Expert Economist

Expert Housing Economists from the National Association of Home Builders Expect Continued Housing Market Recovery: Housing Contribution to GDP is Growing

Housing activities contribute to the economy in two ways:

The first is RFI (residential fixed investment): things like new home construction, remodeling and home improvement activity. “…the trend in recent quarters indicates that RFI is growing faster than the economy as a whole,” says Robert Dietz.

But…

RFI was 3% of the GDP this quarter, and even though that is its fourth strongest level “since after the Great Recession”, its historical average is roughly 5%. That 15.5% share historically contributed about “17% to 18% of the GDP”. But “these shares tend to vary over the business cycle”. (All quotes per the NAHB’s ‘Eye On Housing’ article).

So I asked Mr. Dietz:

“The last sentence [of the article], about these shares varying over the business cycle begs the question: should/can we expect growth in RFI and general Housing GDP share over the next three quarters?”

And Robert Dietz replied:

“Yes – expect growth in 2014. NAHB is forecasting housing starts will eclipse one million starts for the year for the first time since the Great Recession, which will boost RFI and housing’s share of GDP.”

You can see the sharp drop in RFI and Housing’s GDP share in general, starting between 2004 and 2006 and continuously declining until the last couple years: in the last couple years it has been growing and, according to expert Robert Dietz, it will continue to grow. Great news for homeowners, contractors, home-buyers… Everyone!

Read Robert Dietz’s Article on Housing’s GDP Contribution

For more, follow Robert Dietz and the National Association of Home Builders on Twitter: @dietz_econ & @NAHBmedia


View my Google Plus profile: Richard J. D’Angelo, founding owner-operator of CraftPro Contracting and author of this article, which is a summary of Robert Dietz’s article on the NAHB’s “Eye on Housing” blog. I am the owner of CraftPro Contracting, a home improvement contractor (painting, drywall and carpentry) in Morris County, NJ. Check out CraftPro on Google+ and our online community of home improvement, maintenance and renovation professionals to learn more about home improvements.


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