Housing Industry Growth Spreads to Other Sectors

By Stevie Duffin Updated on 4/1/2013

By Daniel Duffield

With the increasing strength of the housing market, similar industries have also seen a boost this year, with many analysts indicating that the U.S. economy is beginning to regain its former vitality. According to Lawrence Yun, a chief economist for the National Association of Realtors, the housing market has resulted in a notable growth in the American economy across multiple sectors.

Economic Gains from Housing Market Improvement

Yun stated that residential construction, remodeling, moving, gardening, and furniture buying have risen such as to constitute a considerable 20% of the U.S. gross domestic product (GDP), one of the primary reasons that the upward movement in the housing market has been so impactful.

In addition, Yun believes that at the collective of U.S. homes will be worth approximately $3 trillion more than during the bottom of the housing market several years ago, providing a substantial increase in consumer spending amounting to roughly $100 billion during 2013.

Housing Inventory Declines, Prices Rise

Eric Belsky, director of the Joint Center for Housing Studies at Harvard University, stated that given the current housing market trends of a falling inventory and greater demand, housing prices will grow stronger.

Belsky continued that this has resulted in a momentum within the housing sector that has pulled housing values upward, lessening the number of underwater borrowers; however, he notes that this has not resulted in any increase in home selling.

Labor Sector Grows As Well

Home Depot, major home renovation retailer, is currently hiring roughly 80,000 laborers for the spring season, with Lowe’s planning to hire upwards of 9,000 new workers in addition to the standard 45,000 seasonal hires.

These retail businesses see the current market as one in which customers will be interested in large home projects due to the rise in consumer confidence. As such, the labor sector has grown along with the housing industry gains.