Housing Downturn Drags on Economy
It's not just loan performance that has suffered as a result of the housing downturn. The whole economy has received a jolt, according to a research note from the Mortgage Bankers Association.
The MBA estimates that residential investment has accounted for 5% of gross domestic product during the past 10 years. But in 2006, for the first time since 2005, a decline in residential investment actually subtracted from national economic growth.
And that trend persisted into the first quarter of 2007, according to the MBA. The MBA estimates that residential investment, which encompasses a wide range of construction, home sales, Realtor commissions, renovations and additions, and rental activity, declined at a 17.2% annual rate in the first quarter, pushing GDP growth down by one percentage point.
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