Jobs Created in the U.S. When a Home is Built

In an article published the first day of this month, NAHB released new estimates of the impact that building single-family and multifamily homes has on the U.S. economy. The new estimates show that building an average single-family home generates 2.97 jobs, measured in full-time equivalents (enough work to keep one worker employed for a year).

A substantial share of this is employment for construction workers. But also included is employment in firms that manufacture building products, transport and sell products, and provide professional services to home builders and buyers (e.g., architects and real estate agents). A breakdown by industry is shown below, along with the wages and business profits generated in the process.Single-familyWages and profits are subject to a variety of taxes and fees. The national impacts of building an average single-family home include $74,354 in federal taxes and $36,603 in state and local fees and taxes, for a total of $110,957 in revenue for governments at all levels.

The article also shows equivalent estimates for building an average rental apartment, including 1.13 (full-time equivalent) jobs, with a breakdown by industry as shown below.MultifamilyEstimates of wages and jobs garner the most attention, but in industries like construction and real estate it can also be worthwhile to look at profits generated for business proprietors. Included in this category are many construction subcontractors and real estate brokers with relatively modest incomes, who are organized as independent contractors and therefore not technically counted as having jobs—although casual observers no doubt tend to think of them that way.

The impacts of building an average rental apartment include $28,375 in federal taxes and $14,008 in state and local fees and taxes, for a total of $42,383 in revenue for governments at all levels. For more details and assumptions used to produce the above estimates, consult the full article.

And keep in mind that these are national estimates, designed for use when the impacts on suppliers of goods and services across the country are of interest. Avoid trying to use national estimates to say something about impacts at the state or local level.  For that, keep referring to NAHB’s Local Economic Impact web page.

8 Responses to Jobs Created in the U.S. When a Home is Built

  1. Reblogged this on Southern California Real Estate – IrvineHomeBlog.com and commented:
    As Unemployment numbers get better, we can see more buyers stepping in. Interest Rates holding their own and down a bit have helped many buyers. In Irvine, Ca builders are rolling out New developments like Orchard Hills which is expected to receive massive demand.

  2. […] Read more (and there is more, and it’s interesting) — here. […]

  3. […] Economic impact of home building – construction of a typical single-family home creates on average three jobs […]

  4. […] like the impacts of new construction, a substantial share of the wages and salaries goes to the construction laborers who actually […]

  5. […] like the impacts of new construction, a substantial share of the wages and salaries goes to construction laborers—those who actually […]

  6. […] like the impacts of new construction, a substantial share of the wages and salaries goes to construction laborers—those who actually […]

  7. […] Home improvement spending has a direct economic benefit on the economy. New estimates from NAHB indicate that every $1 million in remodeling spending creates 8.9 jobs. These estimates also note that building 100 single-family homes creates 297 jobs, and developing 100 multifamily units generates 113 jobs. […]

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