Study Shows Critical Importance of New Home Buyers to Overall Economy
The impact that new homeowners have on the strength and growth of the U.S. economy is noticeable—and vital
According to a recent consumer spending analysis from the National Association of Home Builders (NAHB), new home buyers spend about $10,601 on appliances, furnishings, and home improvement projects in their first year of home ownership—2.6 times as much as other homeowners in a typical year.
NAHB says that the study highlights why home building in the U.S. helps drive a healthy economy.
Refrigerators, Couches, And Other Improvements
To help quantify the wave of activity—and cash—spent to install new refrigerators, buy couches, and make other improvements as new owners personalize their homes, NAHB economists studied the U.S. Bureau of Labor Statistics Consumer Expenditure Survey.
"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 NAHB Chairman Granger MacDonald, a home builder and developer in 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," he said.
Noticeable and Vital Impact
During the first two years after closing on a house, a typical buyer of a newly built single-family home tends to spend an average $4,500 more than a similar non-moving homeowner, according to NAHB's findings.
A previous NAHB study based on 2004-2007 data collected during the housing boom showed somewhat higher spending by homeowners overall—but the tendency of buyers to outspend non-moving owners on appliances, home furnishings, and home improvements was similar.
As a whole, NAHB says that non-moving homeowners generate most of the demand for appliances, furnishings, and remodeling projects in a given year because they outnumber new home buyers by a wide margin.
Still, MacDonald emphasizes that the impact of new homeowners' is noticeable—and vital. "The health of housing – and new home buying – is key to the overall state of our economy," he added.