alt.politics.economics

On Sep 12, 7:12 am, alexy wrote:
> alexy wrote:
> >Those 74,000 homes include those bought while
> >under construction. Historically, only 25% of the new homes bought
> >were after completion. if the same held true of July, that means that
> >about 56,000 of those homes were under construction. If 1/3 of those
> >are canceled, that is nearly 19,000 homes. To the extent that the
> >builders stop working on those homes rather than building them out on
> >spec, that would represent a lowering of GDP.
>
> >So, let's use your $300,000 price point, 19,000 homes, at 50%
> >completion when the order is canceled, and 50% of the builders stop
> >working on the houses rather than building them on spec. That would be
> >a reduction of GDP of $300k x 19k x .5 x .5 = billion, or about
> >a % decrease in monthly GDP. Not quite the 12% you estimated, but
> >still nothing to sneeze at.
>
> Thinking about it, this estimate overlooks an important effect of
> house sales on GDP. House sales (new or used) often lead to increased
> sales of appliances, furniture, bedding, etc., all of which
> contributes to the GDP. And used house sales probably increase
> remodeling activity. So while sales of houses from inventory might not
> directly affect the GDP, they can have a significant effect through
> related economic activity that those sales spur.
> --
> Alex -- Replace "nospam" with "mail" to reply by email. Checked infrequently.

you connected the dots. amazing.