Housing recovery not yet providing substantial boost to U.S. economy
As the nation’s housing market recovers, it is not providing the economic kick many where hoping for, MSNBC reported. Despite growth in construction and related industries, and rising home-sale prices, the housing market is still not close to providing the same kind of economic benefits to U.S. as it had prior to the recession.
Americans are likely to spend approximately $134.2 billion on home renovations in the 12 months leading up to June 2013, which was up from $115.3 billion at the end of September this year, according to Harvard University’s Joint Center for Housing Studies. But that is still 8 percent off the spending peak in mid 2007 — back when home owners were more willing to borrow to make repairs.
Overall residential investment’s contribution to GDP has fallen from to 2.5 percent in the third quarter of this year — from 6 percent in 2005.
But steady, if slow, growth in housing and related industries is helping to maintain this year’s pace of growth.
“People always ask, ‘What’s going to drive the recovery?’ Scott Brown, chief economist at Raymond James, a financial advisory firm, said. “It’s never usually one particular thing, but a lot of little things getting better at the same time.” [MSNBC] —Christopher Cameron