In one of the best years that the industry has ever seen, the real estate sector—driven by record-level price gains and strong demand—contributed significantly to the U.S. economic recovery last year, according to recent data released by the National Association of REALTORS® (NAR).
In a recent analysis of real estate’s economic impact state-by-state, NAR found that the 2021 buzzing housing market helped the industry account for $3.89 billion of the national Gross Domestic Product (GDP)—roughly 17%.
Report highlights
- Nationwide, NAR estimates that each home sale at the median generated about $113,000 of economic impact in 2021.
- NAR estimates that every home sale generates two jobs.
- The top 10 states with the highest income generated from a home sale were Hawaii, Washington D.C., California, Massachusetts, Washington, Oregon, Colorado, Idaho, New Jersey and New Hampshire.
The takeaway:
“Real estate has been, and remains, the foundation of wealth building for the middle class and a critical link in the flow of goods, services and income for millions of Americans,” wrote Nadia Evangelou, senior economist and director of Forecasting at NAR. “Accounting for nearly 17% of the GDP, real estate is clearly a major driver of the U.S. economy.
“How is the housing market in your state affecting the local economy? NAR calculated the total economic impact of real-estate-related industries on the state economy, as well as the expenditures that result from a single home sale, including aspects like home construction costs, real estate brokerage, mortgage lending, and title insurance.”
“Since all real estate is local, the impact of a home sale is even larger in some areas. For instance, in Hawaii and California, more than three jobs are generated from every home sale.”
