In one of the best years that the industry has ever seen, the real estate sector—driven by record-level price gains and strong demand—contributed significantly to the U.S. economic recovery last year, according to recent data released by the National Association of REALTORS® (NAR).
In a recent analysis of real estate’s economic impact state-by-state, NAR found that the 2021 buzzing housing market helped the industry account for $3.89 billion of the national Gross Domestic Product (GDP)—roughly 17%.
- Nationwide, NAR estimates that each home sale at the median generated about $113,000 of economic impact in 2021.
- NAR estimates that every home sale generates two jobs.
- The top 10 states with the highest income generated from a home sale were Hawaii, Washington D.C., California, Massachusetts, Washington, Oregon, Colorado, Idaho, New Jersey and New Hampshire.
“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,” wrote Nadia Evangelou, senior economist and director of Forecasting at NAR. “Accounting for nearly 17% of the GDP, real estate is clearly a major driver of the U.S. economy.
“How is the housing market in your state affecting the local economy? NAR calculated the total economic impact of real-estate-related industries on the state economy, as well as the expenditures that result from a single home sale, including aspects like home construction costs, real estate brokerage, mortgage lending, and title insurance.”
“Since all real estate is local, the impact of a home sale is even larger in some areas. For instance, in Hawaii and California, more than three jobs are generated from every home sale.”