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Have you ever wondered what the economical impact of a home sale is on the U.S. economy? Well, wonder no more! The folks at KCM Blog were kind enough to break it down for us with interesting results!
Recently, 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 $56,464!
How does this number break down?
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 home is sold in the U.S. …
- $14,958 is income generated from real estate related industries
- $5,647 for additional expenditures on consumer items such as on furniture, appliances, and paint service
- $3,509 for expenditures on remodeling within 2 years of purchase
A home sale generates an economic multiplier impact as well. There is a greater spending at restaurants, sports games, and charity events. The size of this “multiplier” effect is estimated to be at$11,575.
Additional home sales also 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.
Add up the numbers and it totals over $56,000! Very interesting!