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Housing

Housing Spending Rose in Q1 to 17.6% of Total GDP

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By Paul Ausick Updated Published
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Housing development
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The sequential 2.9% decline in U.S. gross domestic product (GDP) in the first quarter of 2014 was lower than expected and the largest drop since the first quarter of 2009. There was at least one bit of good news, though, and that came from spending on items related to housing.

According to research firm CoreLogic, spending on housing not only increased, the increase in the third revision issued last week by the U.S. Bureau of Economic Analysis showed the increase rising from a prior estimate of 3.3% to 3.6%. CoreLogic includes three spending categories in its total: residential investment (the construction of new single-family and multifamily houses), spending on housing services (rent, owner’s equivalent rent and utilities) and spending on furnishings and durable goods.

Spending on housing was flat with the fourth quarter of 2013, but lower than the high of 20.6% of GDP in the third quarter of 2005. Rent and utilities accounted for 12.6% of housing-related GDP, residential investment accounted for 3.1%, and furnishings and durable goods accounted for 2% of spending. CoreLogic said that the fluctuations in housing-related GDP are due primarily to changes in residential investment, which made up 6.2% of GDP in 2005, twice the total of the 2014 first quarter.

ALSO READ: Homebuilders Have Lagged the Market — Four to Buy Now

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About the Author Paul Ausick →

Paul Ausick has been writing for a673b.bigscoots-temp.com for more than a decade. He has written extensively on investing in the energy, defense, and technology sectors. In a previous life, he wrote technical documentation and managed a marketing communications group in Silicon Valley.

He has a bachelor's degree in English from the University of Chicago and now lives in Montana, where he fishes for trout in the summer and stays inside during the winter.

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