Home Buying a Strong Boost to Overall Economy

In their first year of ownership, new home buyers spend about $10,601 

By Jeff Sorg, OnlineEd Blog

(July 14, 2017)

canstockphoto282379female moneyA new consumer spending analysis from the National Association of Home Builders (NAHB) highlights another reason why home building helps drive a healthy economy: In their first year of ownership, new home buyers spend about $10,601 on appliances, furnishings, and home improvement projects – 2.6 times as much as other home owners in a typical year.

NAHB economists studied the U.S. Bureau of Labor Statistics Consumer Expenditure Survey to help quantify the wave of activity – and cash – spent to install new refrigerators, buy couches and make other improvements as new owners personalize their homes.

“While construction jobs are the most obvious impact of new homes on the economy, it’s important to realize that it doesn’t stop there,” said NAHB Chairman Granger MacDonald, a home builder and developer in Kerrville, Texas.

“It’s the architects, the heating technicians, the lumber suppliers. And it’s the mom-and-pop owners at the local furniture or appliance store who are helping these buyers make their house a home,” he said.

During the first two years after closing on the house, a typical buyer of a newly built single-family home tends to spend on average $4,500 more than a similar non-moving home owner.

A previous NAHB study based on 2004-2007 data collected during the housing boom showed somewhat higher spending by home owners overall.  But the tendency of buyers to outspend non-moving owners on appliances, furnishings, and home improvements was similar.

In the aggregate, most of the demand for appliances, furnishings and remodeling projects in a given year is generated by non-moving home owners, because they outnumber home buyers by such a wide margin.

But new owners’ impact is noticeable – and vital, MacDonald said. “The health of housing – and new home buying – is key to the overall state of our economy.”

See the study at http://www.nahb.org/spendingpatterns.

[Source: National Association of Home Builders]

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Jeff Sorg

About the Author

Jeff Sorg is a co-founder of OnlineEd®, a Web-based vocational school founded in 1997 where he also serves as Corporate Secretary, Chief Operating Officer, and School Director. Sorg holds vocational instructor licenses in Oregon, Washington, California, and Nevada and has authored numerous pre-licensing and continuing education courses. Sorg was awarded the International Distance Education Certification Center's CDEi Designation for distance education in 2008. OnlineEd® provides real estate, mortgage broker, insurance, and contractor pre-license, post-license, continuing education, career enhancement, and professional development and designation courses over the Internet.