<p>Home construction is a form of investment, home purchase is not. There's an important macro difference between creating the capital asset (construction) and transferring it (purchase).</p>

<p>Regarding whether a newly built home occupied by its owner counts as investment— yes, because it is a capital asset that produces a stream of housing services. There's more detail on how this fits into GDP in<a href="https://economics.stackexchange.com/a/8267/264"> this answer</a>. </p>

CC BY-SA 3.0
2016-07-23T18:09:34.593Z
Thanks for your answer. Do you mean that creating capital assets is a form of investment but transferring is not? Thus, FedEx purchasing new trucks is not investment but truck assembling is a form of investment?
xuhdev
CC BY-SA 3.0
2016-07-25T07:17:01.850Z
When A buys a house from B, this is investment by A, but it is also negative investment by B of the same amount (the sale price), and so for the economy as a whole nets to zero.  It might have a different net effect if A and B were in different countries, for example an existing house-boat being moved across the border
Henry
CC BY-SA 3.0
2016-07-23T12:34:43.733Z
2016-07-23T14:32:44.717Z
2017-04-13T12:51:38.253Z
dismalscience
<p>From Wikipedia, investment in macroeconomics is the purchase of goods that are not consumed within a short amount of time (say 3 years). In this sense, home purchase seems to be a form of investment. However, as per my understanding, investment should also involve purchasing new capital goods, which seems to me that primary residence does not qualify. I'm quite confused here: do we consider homes which are only used by their owners as investment, even if these homes are newly built?</p>

<macroeconomics><investment>
Is a home (primary residence) purchase a form of investment in macroeconomics?
xuhdev
# Is a home (primary residence) purchase a form of investment in macroeconomics?

(Asked by: username_0 on 2016-07-23)

From Wikipedia, investment in macroeconomics is the purchase of goods that are not consumed within a short amount of time (say 3 years). In this sense, home purchase seems to be a form of investment. However, as per my understanding, investment should also involve purchasing new capital goods, which seems to me that primary residence does not qualify. I'm quite confused here: do we consider homes which are only used by their owners as investment, even if these homes are newly built?

**Tags:** macroeconomics, investment


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## 1 answers

### Answer by username_1 on 2016-07-23. Score: 4 | Accepted answer

Home construction is a form of investment, home purchase is not. There's an important macro difference between creating the capital asset (construction) and transferring it (purchase).

Regarding whether a newly built home occupied by its owner counts as investment— yes, because it is a capital asset that produces a stream of housing services. There's more detail on how this fits into GDP in [this answer](https://economics.stackexchange.com/a/8267/264).

> **Comments:**
> **username_0**: Thanks for your answer. Do you mean that creating capital assets is a form of investment but transferring is not? Thus, FedEx purchasing new trucks is not investment but truck assembling is a form of investment?  
> **username_2**: When A buys a house from B, this is investment by A, but it is also negative investment by B of the same amount (the sale price), and so for the economy as a whole nets to zero.  It might have a different net effect if A and B were in different countries, for example an existing house-boat being moved across the border  

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