Housing’s share of the economy was 16.1% in the third quarter of 2025, according to the latest estimates of GDP produced by the Bureau of Economic Analysis. This share is down from 16.3% in the second quarter but has remained about 16% since the fourth quarter of 2019.
The more cyclical home building and remodeling component–residential fixed investment (RFI)–was 3.8% of GDP, down from 3.9% in the previous quarter. The second component, housing services, was 12.3% of GDP, down from 12.4% in the previous quarter. The graph below plots the share for housing services and RFI along with housing’s total share of nominal GDP.
Housing service growth is much less volatile when compared to RFI due to the cyclical nature of RFI. 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. These shares tend to vary over the business cycle. However, the housing share of GDP lagged during the post-Great Recession period due to underbuilding, particularly for the single-family sector.
Residential Fixed Investment
In the third quarter, RFI subtracted 21 basis points from headline GDP growth rate, marking the third consecutive quarter of negative contributions. RFI was 3.8% of the economy, recording a $1.2 trillion seasonally adjusted annual pace. Among the two segments of RFI, private investment in structures fell 5.3%, while residential equipment rose 0.5%. In total, real private fixed investment was up 1.0% in the third quarter. This increase is a direct result of the ongoing AI and data center build out across the U.S., as investment in information processing equipment continues to have a record year, growing 8.4% in the third quarter, following 11.7% in second quarter and 62.7% in the first quarter this year.
Breaking down the components of residential structures, single-family RFI fell 8.9%, while multifamily RFI fell 2.9%. RFI for multifamily structures has contracted for eight consecutive quarters. Permanent site structure RFI, which is made up of single-family and multifamily RFI, fell 7.6%. The “other structures” RFI category fell 3.2% in the third quarter.
Housing Services
The second impact of housing on GDP is the measure of housing services. Similar to the RFI, housing services consumption can be broken into two components. The first component, housing, includes gross rents paid by renters, owners’ imputed rent (an estimate of how much it would cost to rent owner-occupied units), rental value of farm dwellings, and group housing. The inclusion of owners’ imputed rent is necessary from a national income accounting approach, because without this measure, increases in homeownership would result in declines in GDP. The second component, household utilities, is composed of consumption expenditures on water supply, sanitation, electricity, and gas.
For the third quarter, housing services represented 12.3% of the economy or $3.8 trillion on a seasonally adjusted annual basis. Real housing services expenditures rose 0.3% at an annual rate in the third quarter. Real personal consumption expenditures for housing grew 1.2%, while real household utilities expenditures fell 5.9%.
Personal consumption expenditures (PCE) for housing services are the largest component of PCE, making up 18.1% in the third quarter. The second largest component of PCE is health care services, at 17.0%. Expenditures on services were $14.6 trillion on a seasonally adjusted annual basis in the third quarter, more than double expenditures on goods ($6.5 trillion).