The following is NAR Chief Economist Lawrence Yun’s reaction to this morning’s U.S. Commerce Department release on Gross Domestic Product (GDP) in the third quarter:
“Economic growth of 3% in the third quarter is quite impressive in light of the some pause in activity in hurricane-impacted regions. The big contributors were a solid rise in business spending on equipment, which burst higher by 8.6%, and improvements in net exports. Consumers spending grew decently at 2.4%.
What was missing in the growth was real estate construction. Private commercial building construction spending fell by 5.2% and residential real estate spending from new home construction and home sales activity declined by 6.0%. This soft construction activity assures continuing tight inventory conditions, and certainly no oversupply concerns in both commercial and residential real estate. If real estate activity can kick higher, since more construction is clearly needed, than it’s expected that economic growth can move at an even higher rate.”