Healthy Housing Industry Spurs Job Growth
The health of housing is key for the overall state of the U.S. economy and housing stands poised to serve as an engine of job growth with the right policies in place, the National Association of Home Builders (NAHB) told Congress.
Testifying before the Senate Banking Committee’s Subcommittee on Economic Policy during a hearing examining the drivers of job creation, NAHB economist Robert Dietz said that home building and remodeling have generated 274,000 jobs over the past 2 ½ years.
“This expansion has direct economic benefits,” said Dietz. “Housing provides the momentum behind an economic recovery because home building and associated businesses employ such a wide range of workers.”
Employment from new home construction and remodeling has a wide ripple effect. About half the jobs created by building new homes are in construction. They include framers, electricians, plumbers and carpenters. Other jobs are spread over other sectors of the economy, including manufacturing, retail, wholesale and business services.
NAHB analysis of the broad impact of new construction shows that building 1,000 average single-family homes generates:
- 2,970 full-time jobs
- $162 million in wages
- $118 million in business income
- $111 million in taxes and revenue for state, local and federal governments
Typically, housing represents 17 to 18 percent of the GPD and the current GPD is 15.5 percent. With a growing population and an aging housing stock, NAHB forecast that single-family construction will increase 22 percent in 2014 to 760,000 units.
This year should be the first year since 2007 in which total housing starts exceed 1 million homes, and this uptick will produce jobs. In April, home builders and remodelers added 13,100 jobs.
While construction is poised to continue to expand and add jobs, builders continue to face persistent headwinds. These include access to building lots, rising building material prices, access to builder loans and worker shortages in some markets.
Passing comprehensive housing finance reform that includes a federal backstop to ensure the availability of the 30-year mortgage, increase private capital in the marketplace and protect the American taxpayer would be a net positive for job creation.