New Homeowners Are Strong Boost to Overall U.S. Economy
According to new consumer spending analysis from the National Association of Home Builders, newly minted homeowners are helping drive a healthy U.S. economy. In their first year of ownership, new home buyers spend about $10,601 on appliances, furnishings and home improvement projects - 2.6 times as much as other home owners in a typical year.
NAHB economists studied the U.S. Bureau of Labor Statistics Consumer Expenditure Survey 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.
"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.
"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.
During the first two years after closing on the house, a typical buyer of a newly built single-family home tends to spend on average $4,500 more than a similar non-moving home owner.
A previous NAHB study based on 2004-2007 data collected during the housing boom showed somewhat higher spending by home owners overall. But the tendency of buyers to outspend non-moving owners on appliances, furnishings and home improvements was similar.
In the aggregate, most of the demand for appliances, furnishings and remodeling projects in a given year is generated by non-moving home owners, because they outnumber home buyers by such a wide margin.
But new owners' impact is noticeable - and vital, MacDonald said. "The health of housing - and new home buying - is key to the overall state of our economy."