An excellent article out of the US National Association of Home Builders this morning demonstrates well what Madison’s has been saying regarding the importance of home building and home sales for the US macroeconomy. The share of real estate activity in US GDP alone provides a strong basis to this analysis:
How US Home Building Can Lead a Recovery by Generating Jobs — NAHB
- The new estimates show that building an average single-family home generates 2.9 US jobs, measured in full-time equivalents.
- The national impacts of building an average single-family home include US$86,759 in federal taxes and US$42,888 in state and local fees and taxes, for a total of US$129,647 in revenue for governments at all levels.
- building an average rental apartment generates 1.25 (full-time equivalent) jobs; as well as US$37,363 in federal taxes and US$18,546 in state and local fees and taxes, for a total of US$55,909 in revenue for governments at all levels.
US 1-Unit Housing Starts Feb 2020 vs Benchmark Construction Framing Dimension Softwood Lumber Prices March 2020
BACKGROUND: Housing and the Broader Economy
As of 2018, spending on housing services in the United States was about US$2.6 trillion, accounting for 11.6% of GDP.
Taken together, spending within the housing market accounted for nearly 15% of total US GDP in 2018. — Oct 2, 2019
Introduction to US Economy, Housing Market:
As of 2018, spending on residential fixed investment was about US$785 billion, accounting for about 3.3% of GDP.
FULL STORY: https://fas.org/sgp/crs/misc/IF11327.pdf
US Average House Prices 4Q 2019 vs Benchmark Construction Framing Dimension Softwood Lumber Prices March 2020
In week ending March 27, 2020, the price of benchmark softwood lumber commodity Western Spruce-Pine-Fir 2×4 #2&Btr KD (RL) were slashed $50, or -12%, from the previous week to US$356 mfbm.
Last week’s price is $90, or -20%, less than it was one month ago. Compared to one year ago, this price is down $22, or 6%.