Housing’s Share of the Economy Grows Higher to Start the Year
In the first quarter of 2025, housing’s share of the U.S. economy rose to 16.4%, marking its highest level since Q3 2022, according to the Bureau of Economic Analysis. This increase reflects a 0.2 percentage point rise from the previous quarter, driven by gains in both residential fixed investment (RFI) and housing services.
RFI, encompassing home construction and remodeling, accounted for 4.1% of GDP, up from 4.0% in Q4 2024. Notably, single-family structure investment grew by 5.9%, while multifamily investment declined by 11.5%, continuing a seven-quarter contraction. Housing services, including rents and utilities, contributed 12.3% to GDP, with household utilities expenditures increasing by 18.7%—the highest since January 2014.
Historically, housing’s share of GDP has averaged between 17% and 18%, but it lagged in the post-Great Recession period due to underbuilding, particularly in the single-family sector. The recent uptick suggests a strengthening housing sector, contributing positively to economic growth.
