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Housing Share of the Economy at 15.3%

February 6, 2014

Eye on Housing

Housing is an important source of economic growth. As of the final quarter of 2013, housing’s share of gross domestic product (GDP) was 15.3%, with home building yielding 3.1 percentage points of that total.

housing share of GDP

Housing-related activities contribute to GDP in two basic ways.

The first is through residential fixed investment (RFI). RFI is effectively the measure of the home building and remodeling contribution to GDP. It includes construction of new single-family and multifamily structures, residential remodeling, production of manufactured homes and brokers’ fees. For the fourth quarter, RFI was 3.1% of the economy.

While the final quarter of 2013 was effectively tied with the second quarter of the year for the strongest level of RFI after the Great Recession ($487 billion annualized pace), the drop from the noticably strong third quarter pace ($500 billion annualized) resulted in home building yielding a negative impact on the fourth quarter headline GDP result of 3.2%…

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