Housing’s Impact on the EconomyPosted 08/11/2014
The dream of owning a new home is alive and well in America, just as it was before the housing crisis hit. But despite the extreme fall out, people still want a place to call their own. A place where they can raise a family, make memories and live comfortably. And, while purchasing a new home provides great opportunity for families looking to improve their lives, the implications are even greater on the economy as a whole.
According to the National Association of Home Builders’ recent analysis of the broad impact of new construction, building 1,000 average single-family homes generates nearly 3,000 jobs, $162 million in wages, $118 million in business income, and $111 million in taxes and revenue collectively for all levels of government. In the past 2.5 years alone, home building and remodeling have produced 274,000 jobs, according to NAHB economist Robert Diez. While staggering, that number could actually be much higher. The NAHB reports that the gap between current production and potential housing production is about 7,000,000 homes, which represents more than 2 million untapped American jobs.
Either due to deferred housing formations, lack of construction financing or flawed appraisal practices under which new homes get compared to distressed and foreclosed properties, the lack of production certainly is hindering the economy. With more than 1.2 million jobs lost since April 2006, the U.S. will need to step up production and build 17 million additional homes over the next decade to keep pace with population growth and demographics.
Currently, policymakers are beginning to debate whether Congress should take action to restore the health of the housing industry and, essentially, put Americans back to work. According to an NAHB survey of 2012 voters conducted by Public Opinion Strategies and Lake Research Partners, home owners and non-owners alike consider owning a home a major part of the American Dream. The survey, which is consistent with a New York Times/CBS News survey, also revealed the majority of Americans agree that the federal government should play a more active role in rebuilding the housing industry to ensure a healthy economy.
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