Housing’s Impact on GDP Dropped Slightly in the Second Quarter

Oct. 3, 2017

Recent total construction spending may be up, after declines in the early summer, and in no large part thanks to spending on private projects, but housing’s share of GDP fell slightly in the second quarter.

According to an analysis by the National Association of Home Builders’ (NAHB) David Logan, the measure of home building, multifamily development and remodeling contributions to the GDP bundled as a residential fixed investment (RFI) figure dropped 0.1% in the second quarter from the first quarter to 3.5% of the nation’s GDP. “This quarter’s decline in RFI is only the fifth since the fourth quarter of 2010,” Logan said.

Also impacting housing’s influence on GDP is the measure of housing services that includes gross rents, owners’ imputed rent—or the estimate of how much it would cost to rent owner-occupied units—and utility payments, he said. In the second quarter, such services made up 12.0% of the GDP or $2.05 trillion at a seasonally adjusted annual rate.

– Nicholas Stern, managing editor

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