According to the Bureau of Economic Analysis (BEA), Q1 GDP growth in 2025 was negative (-0.3%, to be exact).

According to the BEA, “The decrease in real GDP in the first quarter primarily reflected an increase in imports, which are a subtraction in the calculation of GDP, and a decrease in government spending. These movements were partly offset by increases in investment, consumer spending, and exports” (emphasis added).

But over time, GDP trends upward (at least in America), as do home prices. So, how related are they? After all, a growing GDP means people are generally more productive, and employment and wages typically increase. And we already know employment and wages are the two variables correlated most with real estate price growth.
A Look at the Numbers
Let’s look at 40 years of historical data, decade by decade:
At first glance, there’s no discernible pattern other than “they both go up, but not equally.”

GDP may be a macroeconomic signal that drives price change, but real estate is still a hyperlocal industry and is more directly influenced by things such as supply/demand dynamics and interest rates.
But to conclude this article, let’s take a look at just how much GDP growth affects home price growth, along with some classic statistics.
After running something called a “regression analysis,” here’s what the data shows:
- R-squared: 0.318: This means that about 31.8% of the variation in home price appreciation can be explained by GDP growth.
- Coefficient for GDP growth: 0.88: For every 1% increase in GDP growth, home price appreciation tends to increase by about 0.88%, on average.
- P-value for GDP growth: 0.00005: This suggests statistical significance (p < 0.01), so the relationship between home appreciation and GDP growth is unlikely due to chance.
While GDP growth has a statistically significant and positive correlation with home price appreciation, the R-squared value (0.318) confirms that it is only one of several factors. Other drivers (like interest rates, housing inventory, and inflation) likely play larger roles in home price growth during specific periods.
Final Thoughts
In conclusion, even if GDP continues to dip, I really don’t see this having a big impact on home prices. In fact, the only times home prices have dropped significantly in the past 100 years was during the Great Depression and the Great Recession, one of which was a housing bubble.
Ultimately, local market dynamics seem to matter much more than GDP.
Find the Hottest Deals of 2025!
Uncover prime deals in today’s market with the brand new Deal Finder created just for investors like you! Snag great deals FAST with custom buy boxes, comprehensive property insights, and property projections.
You Might Also Like
Beenstay Introduces Nationwide Vacation Rental Management Platform for Airbnb Hosts
Seattle, WA, January 25, 2026 --(PR.com)-- Beenstay announced the availability of a new nationwide platform designed to help Airbnb hosts and...
The FHA Took Care of Its Piggy Bank—Investors Have a Big Reason to Care About That
In This Article Source First (Teacher Rule!): Everything you’re about to learn comes from one textbook: Annual Report to Congress...
White Stone Marketing Supports Celebration Exotic Car Festival Benefiting Make-A-Wish for Third Consecutive Year
Celebration, FL, January 22, 2026 --(PR.com)-- In an era where digital presence dictates the success of large-scale fundraising, White Stone Marketing...
Travel Trends Are Shifting—Here’s How It’s Impacting the Short-Term Rental Market
In This Article Every few years, travel quietly changes its personality. Not in a dramatic, sky-is-falling kind of way. More...








