Home Purchases Kick Off 2-Year Spending Spree

 

DAILY REAL ESTATE NEWS | TUESDAY, OCTOBER 15, 2013

A home purchase sparks an increase in consumer spending — buying new appliances and furnishings, as well as spending on remodeling — that can last for two years, according to the National Association of Home Builders’ analysis of the Consumer Expenditure Survey.

The analysis puts a dollar sign on just how much more home buyers who purchase new and existing homes are likely to spend following a move versus those who don’t move. During the first two years after closing on a house, a buyer of a new single-family home will spend an average of $7,400 more than a similar home owner who doesn’t move. They’ll spend the majority of that amount in the first year: $4,900. Meanwhile, a buyer of an existing single-family home will spend about $4,000 more than a home owner who doesn’t move — $3,600 of which will be spent during the first year.

“This confirms that home buying indeed generates a wave of additional spending and activity not accounted for in the purchase price of the home alone,” writes NAHB on its Eye on Housing blog.

A new-home buyer will spend an average of $3,000 more on furnishings than a similar household who hasn’t moved. In the second year of home ownership, new buyers will likely spend an additional $2,000 more on furnishings. They will also spend more on appliances, usually in the first year of owning, spending $1,005 more on appliances during the first year than a non-moving home owner.

For property repairs and alterations, the difference in expenditures is the smallest, with new-home buyers spending $740 more on property alterations compared to non-moving households.

Source: “The Ripple Effect on Home Buying,” Eye on Housing (Oct. 9, 2013)

About Carrie Sexton

My love for living in Colorado combined with my love for being a Realtor allows me to meet so many great people, and I get to hear some amazing stories. It's important to me to take the time to listen and understand those stories. When working with my clients and customers it often starts with a handshake and ends with a hug because everything in real estate begins with relationships. I would love to chat more, so if you are ready to make a move let's meet for coffee so I can hear YOUR story!

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