A year ago this month, the Economists’ Outlook blog of the National Association of Realtors released an analysis of “pent-up seller demand.” By 2014, a typical homebuyer had lived in his or her house for four years longer than the historical average. Weaker economic conditions, stagnant wages, low interest rates for mortgages and, especially, the housing market crash meant that potential sellers preferred to stay in their homes for longer.
But just as car sales have soared in the past year, so too can home sales—if pent-up sellers start making moves. Mortgage rates remain at historic lows, and home values are up significantly, making this a great time to sell. And in doing so, sellers boost the economy. The NAR’s most recent analysis found that the total economic impact of a typical home sale in the United States is $52,205.
This figure is generated from a median priced home of $176,800. It includes: $15,912 of income generated from real estate industries; $4,429 of additional spending on consumer items such as furniture, appliances, and remodeling; $9,764 of economic “multiplier effect” on general consumer spending from increased income; and $22,100 in construction of new homes, using the standard estimate that one new home is constructed for every 8 existing ones. If a home sells above the median price, the economic impact will be even greater.
Thus, every home sale improves the economy. Consider selling today—Uncle Sam may thank you!