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Grant New Home Sale Generates Thousands for Local Economy

September 19, 2014

Did you know that when a new home is sold in the US, the average total economic impact is an astonishing $52,205! The National Association of Realtors (NAR) compiled data from research conducted by the Bureau of Economic Analysis & Macroeconomic Advisors on the economic impact of a home purchase in the United States. After reviewing the data, NAR concluded that the average total economic impact of a typical home sale in the US is $52,205. The average impact on the state economy varies by state, depending on the average sales price and construction costs. How is the housing market in your state affecting the local economy? The NAR reports outline 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. Find out how much the real estate industry is affecting the gross state product for your area --- click here. Economic contributions are derived from home construction costs (material and labor), real estate brokerage, mortgage lending, title insurance, rental and leasing, home appraisals, moving expenses, and other related activities. Also, additional home sales induce additional home production. Typically, one new home is constructed for every 8 existing home sales.  Therefore, for each existing home sale, 1/8 of new home value is added to the economy, which is estimated to be $22,100.  When you add up the numbers, each new home sale puts about $52,205 back into the economy. In Mississippi, each Grant home sale generates about $39,734 for the state's economy and in Tennessee that number is $40,070. You have heard it said that housing drives our economy. It is true – from supporting local retailers and professionals to providing jobs for skilled labor, residential construction is a vital part of our economy.