Q2 2022 Residential and Commercial Real Estate GDP Details

by Calculated risk on 7/29/2022 11:16:00 AM

The BEA released key details of its advanced Q2 GDP report this morning.

The Office of Electricity and Water reported that investment in non-residential buildings fell at an annual rate of 11.7% in the second quarter.

Investment in petroleum and natural gas structures increased in the second quarter compared to the first quarter and was up 31% year over year.

Click on the chart for a larger picture.

The first chart shows investment in offices, malls, and housing as a percentage of GDP.

Office investment (blue) rose slightly in the second quarter and rose 5.7% year over year. (It’s still declining as a percentage of GDP.)

Investment in multi-commodity shopping structures (shopping malls) peaked in 2007 and rose nearly 10% year-over-year in the second quarter – from a very low level. The vacancy rate in malls is still very high, so investment is likely to remain low for some time.

Investment in accommodation increased slightly in the second quarter compared to the first quarter, and investment in accommodation decreased 2% year-over-year.

All three sectors – offices, shopping malls and hotels – have been hit hard by the pandemic.

Components of residential investment
The second graph is for the components of residential investment as a percentage of GDP. According to the Bureau of Economic Analysis, RI includes new single-family structures, multi-family structures, home improvement, broker commissions and other transfer costs, and a few minor categories (dormitories, manufactured homes).

Although investment in single-family structures has bottomed out, single-family investment is approaching normal levels as a percentage of GDP.

Investment in single-family structures reached $473 billion (about 1.9% of GDP), an increase of 17% year-on-year.

Investment in multiple family structures was unchanged in the second quarter of the first quarter.

Investment in home improvement reached $347 billion at a seasonally adjusted annual rate (SAAR) in the second quarter (about 1.4% of GDP). Spending on home improvement has been strong during the pandemic.

Note that (black) broker commissions increased sharply in the past year as existing home sales increased in the second half of 2020 but declined in the second quarter of 2022. Broker commissions were unchanged year-over-year in the fourth quarter (decreased as a percentage of total output the local) .

Related Posts

Leave a Reply

Your email address will not be published.