What Is the Strongest Tailwind to Today’s Recovering Economy?

Dated: March 17 2021

Views: 19

What Is the Strongest Tailwind to Today’s Recovering Economy?

What Is the Strongest Tailwind to Today’s Recovering Economy? | MyKCM

Last year started off with a bang. Unemployment was under 4%, forecasters were giddy with their projections for the economy, and the residential housing market had the strongest January and February activity in over a decade.

Then came the announcement on March 11, 2020, from the World Health Organization declaring COVID-19 a worldwide pandemic. Two days later, the White House declared it a national emergency. Businesses and schools were forced to close, shelter-in-place mandates were enacted, and the economy came to a screeching halt. As a result, unemployment in this country skyrocketed to 14.9%.

A year later, the economy is recovering, and the U.S. has regained more than half of the jobs that were originally lost. However, some businesses are still closed, and many schools are still struggling to reopen. Despite the past and current challenges, there is one industry that’s proven to be a tailwind helping to counter all of these headwinds to our economy. That industry is housing. Remarkably, the residential real estate market (including existing homes and new construction) has flourished over the last twelve months. Sales are up, prices are appreciating, and more new homes are being built. The housing market has been a pillar of strength in an otherwise slowly recovering economy.

How does the real estate market help the economy?

At the beginning of the pandemic, the National Association of Realtors (NAR) released a report that explained:

“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. Accounting for nearly 18% of the GDP, real estate is clearly a major driver of the U.S. economy.”

The report calculated the total economic impact of real estate-related industries on the economy as well as the expenditures that resulted from a single home sale. At a national level, their research revealed that a single newly constructed home had an economic impact of $88,416.

Here’s how it breaks down:What Is the Strongest Tailwind to Today’s Recovering Economy? | MyKCMThe map below shows the impact by state:What Is the Strongest Tailwind to Today’s Recovering Economy? | MyKCMThe impact of an existing home sale is approximately $40,000.

Real estate has done more for our economic wellbeing than virtually any other industry over the last year. It’s been a beacon of light during a very challenging time in our nation’s history.

Bottom Line

Whether you’re buying a newly constructed home or one that already exists, you’re making a positive economic impact in your local community – and it’s a step toward your homeownership goals as well.

Blog author image

Alex Ortiz

I started my real estate journey in 2001 as an assistant and in 2004 earned my Real Estate License. Since then I have gone through my own buying and selling experience, became an entrepreneur in vario....

Latest Blog Posts

Some Buyers Prefer Smaller Homes

Some Buyers Prefer Smaller HomesOver the past year, we’ve had plenty of opportunities to reflect on what we consider most important in our lives. The place we call home is one of the

Read More

4 Major Reasons Households in Forbearance Won’t Lose Their Homes to Foreclosure

4 Major Reasons Households in Forbearance Won’t Lose Their Homes to ForeclosureThere has been a lot of discussion as to what will happen once the 2.3 million households currently in

Read More

Multigenerational Housing Is Gaining Momentum

Multigenerational Housing Is Gaining Momentum Some HighlightsIf your house is feeling a little cramped with the addition of adult children or aging parents, it might be time to consider a move

Read More

VIDEO: Top 4 Reasons to Own a Home

VIDEO: Top 4 Reasons to Own a HomeOwning a home can have an incredible impact on your quality of life. Let's connect if you're ready to make your dream of homeownership a.

Read More