Housing’s Share of US Real GDP Trends Lower in Q2

A closer look at the US Bureau of Economic Analysis’ “advance” estimate of real gross domestic product (GDP) for Q2, with analysis from the National Association of Home Builders (NAHB), shows that housing accounted for 15.8% of the economy.

The share declined from 15.9% in Q1 and reached its lowest level since 2019. Residential construction, measured by residential fixed investment, rose for the first time in more than a year, while household spending on housing services declined because of lower utility consumption.

Residential fixed investment (RFI) accounted for 3.7% of GDP, unchanged from the previous quarter. Housing services represented 12.1%, down from 12.2% in Q1.

Housing services totaled $3.9 trillion on a seasonally adjusted annual basis. Real housing services expenditures declined 0.1% at an annual rate, as a 1.1% increase in real personal consumption expenditures for housing was offset by an 8.2% decline in real household utility expenditures.

Housing services remained the largest component of personal consumption expenditures (PCE), accounting for 17.9% in Q2. Health care services ranked second at 16.8%. Total services spending was $15.2 trillion on a seasonally adjusted annual basis, compared with $6.9 trillion for goods.