Housing’s share of the economy was 15.7% in the third quarter of 2026, according to the latest estimates of GDP produced by the Bureau of Economic Analysis. This share is down from 15.8% in the second quarter and down from 16.0% a year ago. Residential construction, measured by residential fixed investment, fell for the sixth time over the past eight quarters.

The more cyclical home building and remodeling component–residential fixed investment (RFI)–was 3.6% of GDP, even with the previous quarter. The second component, housing services, was 12.2% of GDP, also even with 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 expenditures are 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 in the single-family sector.

Residential Fixed Investment

In the third quarter, RFI subtracted 12 basis points from the headline GDP growth rate. This reversed the 10 basis points that RFI added to GDP growth in the second quarter. RFI declined 3.3% in the third quarter on an annualized basis to a seasonally adjusted annual rate of $1.17 trillion, down from $1.18 trillion in the second quarter.

RFI can be split into two segments: structures and equipment. Residential structure investment not only consists of new single-family and multifamily units but also includes manufactured homes, improvements, and dormitories. Residential equipment, which accounts for under 2% of total RFI, consists of furniture or household appliances that are purchased by landlords for rental to tenants. Real private investment in structures fell 3.6%, while investment in residential equipment rose 9.9%.

Breaking down the components of residential structures, single-family RFI fell 5.0%, while multifamily RFI rose 0.3%. Permanent site structure RFI, which is made up of single-family and multifamily RFI, fell 3.8%. The “other structures” RFI category was down 3.4% in the third quarter. This component consists primarily of manufactured homes, improvements, and dormitories. On a seasonally adjusted annual basis in the third quarter, private investment in permanent site structures was at $514.9 billion, while other structures totaled $635.4 billion.

While RFI has declined over the past year, nonresidential fixed investment has grown substantially. In the third quarter, nonresidential fixed investment grew 12.7%, the seventh straight quarter of growth. Most of this investment is in nonresidential equipment, as it grew 20.9% in the third quarter. This was led by investment in information processing equipment, specifically computer equipment. Nonresidential structure investment rose 5.4% in the third quarter, led by commercial and health care structure investment. Notably, investment in manufacturing structures fell by double digits for the seventh straight quarter, with a decline of 15.3% on an annualized rate in the third quarter.

Housing Services

The second impact of housing on GDP is the measure of housing services. Similar to 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 12.2% of the economy or $4.0 trillion on a seasonally adjusted annual basis. Real housing services expenditure rose 2.8% at an annual rate in the third quarter. Real personal consumption expenditure for housing grew 1.1%, while real household utilities expenditures rose 15.3%.

Personal consumption expenditure (PCE) on housing services is the largest component of PCE, making up 18.0% in the third quarter. The second largest component of PCE is health care services, at 17.0%. Expenditure on services was $15.4 trillion on a seasonally adjusted annual basis in the third quarter, more than double the expenditure on goods ($6.9 trillion).