Recently the research team at the National Association of Realtors (NAR) looked at studies done by the Bureau of Economic Analysis, the Census Bureau, Macroeconomic Advisors and the Joint Center for Housing Studies at Harvard. After reviewing the data, they determined the total economic impact of a typical home sale in the United States is an astonishing $56,464.
Here is the breakdown of their report:
Economic Contributions are derived from:
- Home construction
- Real estate brokerage
- Mortgage lending
- Title insurance
- Rental and Leasing
- Home appraisal
- Moving truck service
- Other related activities
When a House is Sold in the United States:
$14,958 – Income generated from real estate related industries
$5,647 – Additional expenditure on consumer items such as on furniture, appliances, and paint service
$3,509 – Expenditure on remodeling within 2 years of purchase
It generates an economic multiplier impact. There is a greater spending at restaurants, sports games, and charity events. The size of this “multiplier” effect is estimated to be: $11,575
Additional home sales induce additional home production. Typically one new home is constructed for every 8 existing home sales. Therefore, for each existing home sale, 1/8 of new home value is added to the economy which is estimated in the U.S. to be: $20,775
When you add the numbers up it comes to over $56,000!
