Real Estate Transactions Benefit The Economy
As we have talked about many times before, buying and selling your home can change your life in many ways. However, most people only think of how it will change their life on an individual level. We are here to tell you that the real estate transactions benefit the economy as a whole. A real estate transaction can impact not only you and your family, but your community and local economies as a whole. Real estate makes up close to 20% of all of the United States GDP, so you are helping more than you think. Here is how real estate transactions benefit the economy.
Real Estate Data
One of the most renowned sources for real estate data, NAR (National Association of Realtors), conducts a report each year to show the economic impact of real estate. Each year, this report highlights just how much economic activity an individual home sale can generate. According to the chart below, newly built and existing home sales impact the economy in different ways.
As displayed in the visual provided above, a single home sale can significantly impact the overall economy. On an even deeper level, NAR provides even more information on this phenomenon. A look at the state-to-state level shows a detailed view of economic impact from home sales and how they vary on location. This graph and the one above could raise some questions. Let us answer why a single home sale can have such a widespread effect on the economy.
How It Works
To start, real estate covers many different industries. Real estate makes up for close to a fifth of all economic output in the U.S. each year. This is because the overall industry is made up of many sub-industries. Among those are contractors, specialists, lawyers, town and city officials, and many other professionals at different stages of the process. Every individual involved in a transaction is also part of the housing industry.
This implies that every purchase or sale of a home, new or existing, impacts the economy. Creating economic output might seem like something that is reserved for corporations. However, some of the biggest drivers in our economic system are individuals. This is because of the grave importance on consumer behavior and their ability to spend money without hurting. When the economy is strong, housing is typically strong as well. When housing is strong, that means that consumers are usually strong and able to spend money. With what we have seen in the real estate market over the past few years, it is clear to see that the U.S. economy remains resilient.
Real Estate Transactions Benefit The Economy Every Deal
Homebuyers and home sellers are large economic drivers in their individual communities, cities, states, and nation. For those who are looking to buy or sell a home, remember just how large of an impact that single home actually has. In order to keep up with the housing market, we have seen some wild changes in the industry. This is why real estate will continue to lead the U.S. economy, and why a housing slowdown will likely result in an overall economic slowdown. Keep this in mind when going to buy or sell a home.