The Housing Share of Gross Domestic Product Is Higher in 2022
For the first quarter of 2022 GDP declined at an annual rate of 1.4% causing the housing share to jump up. In fact, reports show an increase of 16.7%. The residential fixed investment (the more cyclical home building and remodeling component) rose to 4.8% of GDP.
Housing and all activities related to housing give to GDP in a couple of ways. The first is through RFI which stands for residential fixed investment. It is effectively the measure of the home building, multifamily development, and remodeling contributions to GDP. It includes construction of new single-family and multifamily structures, residential remodeling, production of manufactured homes and brokers’ fees. The second is the measure of housing services including gross rents (including utilities) paid by renters, and owners’ imputed rent (an estimate of how much it would cost to rent owner-occupied units) and utility payments.
The first quarter of 2022 saw an RFI of 4.8% of the economy which came out to be a $1.18 trillion seasonally adjusted annual pace. The housing services made up 11.9% of the economy which was $2.9 trillion on a seasonally adjusted annual basis. That means the total housing’s share of GDP was 16.7% for the first quarter of 2022.