With the release of the first estimate of first quarter 2019 GDP growth (3.2% growth rate), housing’s share of gross domestic product (GDP) continued a downward trend, more evidence of the the lack of housing supply caused and affected by ongoing housing affordability issues. Housing’s share of GDP fell to 14.7%. The home building and remodeling component – residential fixed investment – made a fifth consecutive negative contribution to GDP growth and declined to just under 3.2% of GDP.
The second impact of housing on GDP is the measure of housing services, which includes 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 inclusion of owners’ imputed rent is necessary from a national income accounting approach, because without this measure, increases in homeownership would result in declines for GDP.