Indicators
Homebuilding Set to Boost US Economy After Two-Year Contraction
- Fed model sees housing adding to GDP for first time since 2021
- Higher rates remain a risk for the sector, economist says
A worker on a single family home under construction in Lehi, Utah, U.S.
Photographer: George Frey/BloombergThis article is for subscribers only.
After eight straight quarters of contraction, it looks like the slide in US residential investment may be finished. The nascent rebound now underway is set to remove a major obstacle to ongoing economic expansion.
With new construction activity at the highest level in more than a year, the Federal Reserve Bank of Atlanta’s GDPNow tracker is projecting residential investment added 0.1% to growth in gross domestic product in the second quarter. Though it may not sound like much, that would mark the first positive contribution since early 2021.