by Bill McBride on 5/04/2010 02:57:00 PM
Tuesday, May 04, 2010
More from the Q1 2010 GDP underlying detail tables ...
Note: Residential investment (RI), according to the Bureau of Economic Analysis (BEA), includes new single family structures, multifamily structures, home improvement, broker's commissions, and a few minor categories.
Back in Q4 2008 - for the first time ever - investment in home improvements exceeded investment in new single family structures. This has continued through Q1 2010.
Click on graph for larger image in new window.
This graph shows the various components of RI as a percent of GDP for the last 50 years. The most important components are investment in single family structures followed by home improvement.
Investment in home improvement was at a $152.9 billion Seasonally Adjusted Annual Rate (SAAR) in Q1, significantly above the level of investment in single family structures of $115.2 billion (SAAR).
Home improvement spending, as a percent of GDP, is close to the long term median - although still declining. Brokers' commissions declined after the initial expiration of the tax credit - but will probably be boosted in Q2 by the extension of the homebuyer tax credit - and then will decline again in Q3.
Investment in single family structures is above the record low set in Q2 2009, and far below the normal level. And investment in multifamily structures is still collapsing. These two categories will not increase significantly until the number of excess housing units is reduced.