The housing market is expected to become a “meaningful contributor” to U.S. economic growth this year and for the foreseeable future, says Ron D’Vari, NewOak CEO and cofounder.
For this year, the housing market sector is expected to provide an estimated 0.5 percent rise to the gross domestic product this year, D’Vari notes.
"While the gradual stabilization of home prices kept the economy from falling into a tailspin, other factors [government and consumer spending] helped dig the economy out of the great recession," D’Vari says. "Until recently home building and related activities were not contributing much to the GDP as housing construction had fallen to its lowest historical levels, far below its natural equilibrium."
The housing sector can affect many areas of the economy, such as mortgage finance, construction companies, general contractors, home furnishings, and appliances, and more.
"Because of large reliance labor, the economic multiplier to the housing sector has been high,” D’Vari says. “Therefore smart investors will be trying to read the tea leaves of the housing sector looking for telltale signs of the U.S. economic growth.”
Source: “Housing begins to directly contribute to economy,” HousingWire (May 20, 2013)
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