A new study from the National Association of Home Builders (NAHB) sheds light on one of the many reasons why home building helps ensure the health of our nation’s economy: it promotes further spending. According to the NAHB’s research into the matter, in their first year of ownership, new home buyers spent about $10,601 on appliances, furnishings and home improvement projects — 2.6 times as much as other home owners in a typical year.
As owners of newly-built homes do things like install new refrigerators and buy more furniture, NAHB economists took to the U.S. Bureau of Labor Statistics Consumer Expenditure Survey to help quantify the activity, as well as the amount of cash, these new home buyers spent.
“While construction jobs are the most obvious impact of new homes on the economy, it’s important to realize that it doesn’t stop there,” said Granger MacDonald, NAHB chairman and home builder and developer from Kerrville, Texas. “It’s the architects, the heating technicians, the lumber suppliers. And it’s the mom-and-pop owners at the local furniture or appliance store who are helping these buyers make their house a home.”
The NAHB found that during the first two years of homeownership, the typical buyer of a newly built single-family home tends to spend on average $4,500 more than a similar non-moving home owner.
The NAHB previously conducted a similar study based on 2004-2007 data that was collected during the housing boom. The data from that study showed somewhat higher spending by homeowners overall. However, the tendency of buyers to outspend non-moving owners on appliances, furnishings and home improvements was similar.
According to the NAHB, most of the demand for appliances, furniture and remodeling projects in a given year is generated specifically by non-moving homeowners, due to the fact that they greatly outnumber home buyers. Nevertheless, MacDonald stresses that each new owners’ impact is not only noticeable, it’s vital. “The health of housing — and new home buying — is key to the overall state of our economy.”
If you’d like to see more about the study, use this link.
To read more about housing news, check out our posts on the following topics:
- Builder Confidence Remains at Healthy Levels
- New Home Sales Increase in May
- Zillow Research reveals most homes can be rented out for a profit
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