Housing-related activities contribute to GDP in two basic ways. Through residential fixed investment (RFI) which includes the construction of new homes and remodeling, and through the measure of housing services, which includes gross rents (including utilities) paid by renters, and owners’ imputed rent and utility payments.
For the fourth quarter, RFI was 3.09% of the economy and reached a $504 billion annualized pace. This is the highest quarterly rate for RFI since the middle of 2008. Housing services was 12.15% of the economy in the fourth quarter.
According to NAHB historically, RFI has averaged roughly 5% of GDP while housing services have averaged between 12% and 13%, for a combined 17% to 18% of GDP.