Monday Market Update: Consumer Spending Is Boosted By…
Purchasing a home! This just-released article from the NAHB reveals how home purchases boost consumer spending.
When you talk about the costs of home ownership, you often think of long-term maintenance, emergency repairs and improvements made over the years. But a brand-new article from the National Association of Home Builders shows that new homeowners of newly-built SFRs spend on average $9,250 MORE on home related expenses than existing homeowners. These costs include expenditures such as appliances, furnishings and remodeling. Outdoor costs include patios, pools, walkways, fences and landscaping.
For contrast, the trend holds true for buyers of older homes. In the first year of homeownership after purchasing an existing home, new buyers spend approximately $7,400 compared to identical homeowners who did not move and spent $4,282 on average.
The bottom line according to NAMB: “Home buying indeed generates a wave of additional spending and activity not accounted for in the purchase price of the home alone.”
What does this mean for you? If you are moving, it is of course a reminder to create a cushion for moving and housing expenses in the first year that may or may not be replicated in the years of homeownership to follow. On a bigger picture perspective, it is an example of the power of the housing market on the economy as a whole. When market conditions and housing policies do not perpetuate the ability to buy a home for the first time or move-up (or invest or purchase a second home!), less money is put into the economy. This impacts varying markets from labor to retail sales.
Have you ever considered how home purchases boost consumer spending beyond the sales price? Have you ever worked in a related industry and experienced the economic impact of reduced home sales? Do you think that record levels of home equity could cause a shift in this trend in the years to come?
Resource Used: How a Home Purchase Boosts Consumer Spending
As always, I welcome your thoughts and feedback!
Warm regards,
Bobbi
Bobbi Decker
DRE#00607999
Broker Associate, Bobbi Decker & Associates
650.346.5352 cell
650.577.3127 efax
www.bobbidecker.com
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