How a Home Purchase Boosts Consumer Spending

Source: NAHB — 

Using the Consumer Expenditure Survey (CES) data from the Bureau of Labor Statistics (BLS), NAHB Economics estimates that a home purchase triggers significant spending on appliances, furnishings, and remodeling. NAHB’s most recent estimates are based on the pre-pandemic 2017-2019 data and show that during the first year after closing on the house, a typical buyer of a newly-built single-family detached home spends on average $9,250 more than a similar non-moving home owner. Likewise, a buyer of an existing single-family detached home tends to spend over $5,240 more than a similar non-moving home owner, as a result of a home purchase.

The NAHB analysis compares spending behavior among three groups of single-family detached home owners: buyers of new homes, buyers of existing homes and non-moving owners. Home buyers, and new home buyers in particular, tend to be larger households with children, and on average wealthier, with higher levels of education and concentrated in urban areas. Any of these factors could potentially explain higher spending on appliances, furnishings and remodeling by home buyers.