Economic Impact of Homebuilding and Remodeling
Blocked streets, noisy construction and unwelcome trash can be just a few of the inconveniences that come along with a neighbor’s new home construction or home remodeling. However, a report released in early May by the National Association of Homebuilders (NAHB) confirms that for the overall good of the nation’s economy, some of these inconveniences may be worth the hassle.
Residential home building is back, and it’s helping the economy in a big way
The NAHB’s report calculated the approximate number of jobs that are created and how much tax revenue is generated relative to the different types of residential construction projects. It found that the construction of an average single-family home creates approximately 2.97 jobs and generates approximately $111,000 in taxes per home. Not having quite as significant of an impact, but still highly beneficial to the economy, are rental apartment construction projects, which create roughly 1.13 jobs per unit and generate approximately $42,000 in taxes per unit. In generating these statistics, the NAHB defined a “job” as work that can keep one worker employed for an entire year based on an average number of hours worked per week in the homebuilding industry.
A robust homebuilding market has wide-reaching benefits. In addition to the workers in a variety of construction and remodeling industries, including lumber, concrete and HVAC, other beneficiaries include workers that transport homebuilding materials and products, as well as those in the service sectors, such as architects, engineers, real estate agents, lawyers and accountants.
This latest report is the first update to the NAHB’s National Impact of Home Building estimates since 2008. Interestingly, the statistics related to tax revenue and jobs-per-housing-unit are roughly equal to what they were in the 2008 report, but the NAHB article indicates that that is likely due to inflation, changes in housing preferences and the use of somewhat revised metrics in determining these estimates.
