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Economic Role of the Housing Industry – Learn About the Facts

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We often hear that the housing industry is a key indicator of the U.S. economic recovery – and a key driver in that recovery – but how many Americans really understand the facts?

The National Association of Home Builders (NAHB) has examined the economic benefits of new home construction, and the facts are compelling – especially in three key areas:

  • Jobs…Jobs…and more Jobs
  • Generating Taxes for Communities
  • Housing’s Role in Putting America Back on Track
New Home being built


The NAHB estimates that for each new single-family home that is built, three new jobs are created. These jobs are created in the construction and manufacturing industries, where lumber, concrete, lighting fixtures, heating and cooling equipment, and other home products are produced. Further jobs are created for those who provide services to home builders and home buyers, such as real estate agents, lawyers, brokers, architects, landscapers and so on. Best of all, housing is “Made in America”, with most of the products used in home construction and remodeling being manufactured right here in the U.S. of A. There is no denying that residential construction has a positive, direct impact on the U.S. economy.

Generating Taxes for Vibrant Communities:

New homes bring money into our communities by increasing the property tax base. The revenue generated supports local communities through their schools, parks, roads and other infrastructure. The NAHB estimates that for each new single-family home built, it generates $23,000 in state and local taxes and $67,000 in federal taxes, for a total of $90,000 in government revenue (see Table below for details).

Role of Housing Industry in Putting America Back on Track:

It is estimated that the U.S. needs a trend of 1.7 to 1.8 million new homes each year to accommodate population growth and replacement of older housing stock. The NAHB forecasted 932,000 housing starts in 2013, obviously well below the volume of housing starts needed. This gap between the current production and potential housing construction needed is approximately 800,000 homes, which represents nearly 2.4 million American jobs waiting to be created. In “normal” economic times, housing accounts for more than 17 percent of the Gross Domestic Product.

In addition to benefits directly related to home construction, a vibrant housing market helps America’s economy by increasing home values. The “wealth effect” of increased home values and equity encourages consumer spending and economic activity. Increasing home values also allow entrepreneurial homeowners to use equity to create new businesses (and jobs).


It’s clear that restoring the health of the housing industry is a critical step in the U.S.’s economic recovery. As the housing market continues to grow, the homebuilding industry will do its part to keep it going. So if you’re a member of the homebuilding industry you should not only be proud of the work you do, but also the impact it has on the economic health of our country. And if you’re a new home buyer, you are a critical part of this equation that wouldn’t work without you.

The NAHB tracks economic data about the home building industry, and you can find out more about the effect of new homes on the economy at its web site.


TABLE showing tax revenue from New Home construction & effect of housing industry



    • Steve at says

      Thanks, Jim. I appreciate your kind words.

      Be sure to search through some of our other real estate, lot and land resources on the site too. Let us know your thoughts!

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