How Each Home Sale Adds to the Economy
May 7, 2020
While the economy faces a slowdown from the COVID-19 pandemic, economists are pointing to the housing market as a way to jumpstart the recovery. Every home sale added at least $54,741, up to a maximum of $184,763, to the economy in 2019, the National Association of REALTORS® reports. And economists point out that home sales can have that same economic boost during the coronavirus pandemic, too.
“Real estate has been, and remains, the foundation for wealth building for the middle class and a critical link in the flow of goods, services, and income for millions of Americans,” Nadia Evangelou, a research economist with NAR, notes on the association’s Economists’ Outlook blog. Real estate accounts for nearly 18% of the GDP.
NAR calculated the total economic impact that real estate–related industries can have on individual state economies, and how the expenditures from a single home sale can drive other businesses, like in home construction, real estate brokerages, mortgage lending, title insurance, and more.
The states with the largest economic impact from each home sale in 2019 were:
- Washington, D.C.: $184,760
- Hawaii: $184,700
- California: $171,390
- Washington: $132,740
- Massachusetts: $128,810
- Colorado: $122,780
- Oregon: $118,430
“Every Home Sale Adds More Than $88,000 to the Economy. How do Home Sales Affect the Economy in Your State?” National Association of REALTORS®’ Economists’ Outlook blog (May 6, 2020)
Updated: August 13, 2020