The relationship between the economy and the housing market is certainly a unique one, and it plays a huge role in the way we make decisions, spend money, and go about our daily lives. The National Association of Realtors (NAR) recently published an article detailing the real estate industry’s incredible influence on the economy in the past, through the recession, and in present day.
Historically, the real estate industry accounts for about 18% of Gross Domestic Product (GDP). The behaviors of the housing market and the economy often mirror each other, which allows one to ‘boost’ the other when needed. Confidence in the economy could encourage home shoppers to feel better about buying homes, which might translate to more overall confidence in the economy.
The ways in which the housing market influences the economy are vast. Not only are jobs created when new homes are built, but spending ripples throughout the entire home buying process. When new homeowners settle in, there will be additional spending to furnish their new houses and make them homes. Naturally, this continuing cycle contributes to the housing market’s overall impact on the economy.
According to NAR, “low mortgage rates in 2012 and 2013 boosted buyers confidence and sales, which in turn helped to expand the economic impact of housing.” Experts predict that in the years ahead, growing confidence levels and economic improvements will also bring more activity to the real estate market. In fact, the National Association of Home Builders (NAHB) published their predictions for this year and next, and they’re quite encouraging. According to the NAHB, economists believe single-family housing production could increase as much as 22% this year, when compared to last year, as well as grow an additional 55% in 2015.
At Christopher Companies, we’re proud to say the homes we build do their part to contribute to the economy. Both our townhomes at Marina Landing in Woodbridge, VA and at Wharton’s Bluff in Millsboro, DE, are currently under construction and attracting homebuyers with their favorable locations and classic home designs – these rare townhomes are selling quickly!
Source: The National Association of Realtors, The National Association of Home Builders