From the course: Economics for Everyone: Housing Markets in Crisis

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The importance of housing

The importance of housing

From the course: Economics for Everyone: Housing Markets in Crisis

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The importance of housing

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- Housing's important in three big ways. First, housing's a big part of GDP. Second, housing's important for people's wealth and net worth. And third, housing is important for the job market. Let's take a deeper look at each of these three ways housing matters. First, there's the GDP contribution. Housing makes up between 15 and 18% of GDP in any given year and this breaks out in two different ways. First, housing contributes to residential investment. That's about three to 5% of GDP, which includes construction of new single family and multifamily structures, residential remodeling, production of manufactured homes, and broker fees. The second way that housing's important is the consumption spending on housing services. These average roughly 12 to 13% of GDP and include gross rents and utilities paid by renters, as well as owners' imputed rents and utility payments. 15 to 18% of GDP is a lot and you can see why people…

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