According to Calculated Risk Blog, the investments in home improvement exceed investments in new single family structures for the first time in 50 years.
This graph shows the various components of RI (Residential Investments) as a percent of GDP for the last 50 years. The most important components are investment in single family structures followed by home improvement.
Investment in home improvement was at a $162.3 billion Seasonally Adjusted Annual Rate (SAAR) in Q1, significantly above investment in single family structures of $113.7 billion (SAAR).
Let’s take a closer look at these two key components of RI:
As everyone knows, investment in single family structures has fallen off a cliff. This is the component of RI that gets all the media attention – although usually from stories about single family starts and new home sales.
Currently investment in single family structures is at 0.8% of GDP, significantly below the average of the last 50 years of 2.35% – and also below the previous record low in 1982 of 1.20%.