When the housing market is strong, good things happen in the U.S. economy. When homes are not selling, the economy stagnates. The reasons may be complex for economists in their ivory towers, but relatively simple for Realtors on the ground who facilitate the real estate market.
When new homes are being built, workers have jobs. An entire industry of road builders, sewer and utility workers, heavy equipment operators, roofers, masons, painters, carpenters, electricians, plumbers, a/c installers, pool builders, landscapers, and government workers are gainfully employed in the building process. Appliances are purchased, window treatments are installed, floors are laid, doors and windows are manufactured and installed. The new house is just the tip of the iceberg.
When an existing home is re-sold, the seller usually moves on to reinvest in another home. The buyer employs painters, handymen, pavers, roofers, pool finishers, flooring specialists, etc. More often than not, furniture, appliances, window treatments, and accessories are purchased for the new home. A ripple effect is created in the economy, with every worker, supplier, realtor and banker benefitting from the transaction. They, in turn, continue to expand the ripple.
In recent years we’ve witnessed first-hand the impact of housing on the U.S. economy. During the Great Recession that took hold around 2008 and lasted for 4 or 5 years, the housing market was at a standstill. So was the economy. Unemployment skyrocketed. Gradually, as housing demand recovered and new construction came back to life, the economy picked up steam.
Today, with housing back on track, the employment level is growing and local governments have begun to spend on infrastructure projects. If we want our economy to continue to prosper, it is critically important to maintain a healthy and active housing market. It is good for the economy, and it is good for the American people who enjoy having the home of their dreams.