NEW HOUSING VITAL TO OVERALL ECONOMY
- Housing and the economy are inextricably connected. It’s well known that a vibrant housing market is good for local economies. But the dozens of industries negatively impacted during the recent recession emphasized the
importance of a thriving market on the overall economy.
Top reasons why a robust new home building industry is crucial to the overall health of the national economy:
- Sustainability: A sustainable economy needs consumers to spend money. A lack of investment slows down the economy, which in turns makes consumers even less willing to spend money and invest.
- Employment: Building a new home entails a wide range of primary laborers including carpenters, plumbers, flooring and carpet installers, and general contractors as well as secondary industries from cable companies and
realtors to furniture stores and insurance companies.
- Trickle down: In addition to the skilled and unskilled laborers working on the new homes, associated industries also benefit.
- Taxes: A newly built single family residence generates $90,000 in federal, state, and local tax revenue.
- Reduced crime: The pride of homeownership and the sense of community contribute to lowering the crime rate of a neighborhood. In addition, new homeowners are generally more watchful and invest in private security.
- Boost to manufacturing: New homes are considered durable goods because they require furnishings.
- Consumer confidence: As new home sales increase so does consumer confidence in the economy and public morale, which leads to more investment and leisure spending that benefits retailers.
- Families: New homes tend to attract professionals, young couples, and families to a community, benefiting local businesses.
Derek Thompson, senior editor at The Atlantic, says new housing impacts multiple sectors and helps drive the overall economy. You simply can’t have one without the other.