How The Housing Market is Affecting Housing-Tied Sectors

Posted December 19, 2023

The Federal Reserve’s impact on high-interest rates for the housing market has been bleeding into multiple housing-tied sectors, leaving other businesses that strive on people buying and furnishing their homes with lower sales and employment.

The state of the housing market has been spilling over into furniture sellers and construction firms, the Wall Street Journal reported Tuesday.

Overall spending on furniture and at-home-improvement stores has decreased in 2023 compared with 2022, according to data from the Commerce Department. Furniture and home furnishing store sales fell to -7.3 percent in November, while building materials, garden equipment and supply dealer sales fell to -2.5 percent.

The effects don’t halt at just sales due to lower spending tricking down to the workers. Workers employed by building materials, garden equipment and supply dealers experienced the most dramatic dip in employment numbers with a dip to -4 percent.

Other job sectors that continue to steadily decrease alongside the housing market include furniture retailers, electronic appliance retailers, landscaping and even real estate agents.

Kenneth Simonson, chief economist at Associated General Contractors of America, who spoke with the WSJ believes that sales of existing homes will continue to depress well into 2024 and the effects it has on other sectors related to the market will feel the pressure too.