Housing-related expenditures totaled 17.5 percent of the nation’s total Gross Domestic Product in the second quarter this year, when the overall GDP climbed at a 4 percent clip, up from a -2.1 percent rate in the first quarter, according to CoreLogic, which tracks and forecasts housing.
Housing related expenditures include home construction, both single and multi-family, housing services (rent, owners equivalent rent and utilities) and furnishings and durable goods.
As impressive at the 17.5 percent share is, it’s 0.2 points below the number posted a year ago and nearly 3 points below the all-time high of 20.6 percent in the third quarter of 2005, the CoreLogic report said.
A look at the historical spending shows that spending on housing services is steadfastly the lion’s share of total housing-related expenditures, and it has remained pretty stable from boom to bust to back again.
Not surprisingly, construction spending plunged after the 2007 stock market crash and stayed in the cellar for more than three years.
Spending on furnishings and durable goods followed construction spending on the downward path, and began rebounding prior to a pickup of construction activity.
But CoreLogic found that, nationwide, growth in residential investment has slowed dramatically since last year while spending on furnishings and durable goods grew by 6.9 percent in just the last quarter.