Instant Reaction: Second Quarter GDP

The following is NAR Chief Economist Lawrence Yun’s reaction to today’s Commerce Department release of second quarter Gross Domestic Product (GDP):

“GDP growth in the second quarter shows the economy barely above water. It marks the third consecutive quarter of near 1 percent growth as opposed to the historical long-term average of 3 percent. Consumers did their job by spending robustly, which should partly be attributed to the $2 trillion in housing wealth accumulation in the past year. However, residential construction fell due to weaker single-family housing starts in the second quarter versus the first quarter. Businesses, meanwhile, are on strike as they cut back spending. Going forward, GDP should avoid recession for the simple reason that more new homes need to be constructed. America is experiencing a housing shortage crisis. More homes need to be built and that in turn will lead to faster economic growth.”