Housing Wealth Effects: Housing’s Impact on Wealth Accumulation, Wealth Distribution and Consumer Spending

W04-13: Over the past 50 years, housing expenditures have accounted for more than one fifth of the nation’s gross domestic product. But housing’s influence on the economy extends beyond its direct contribution Careful analysis reveals that housing also influences the level of consumer spending. When housing wealth increases, consumers spend more. Indeed, they spend even more freely when capital gains from home sales and home equity borrowing escalate in tandem with rising home values…