From Wikipedia, investment in macroeconomics is the purchase of goods that are not consumed within a short amount of time (say 3 years). In this sense, home purchase seems to be a form of investment. However, as per my understanding, investment should also involve purchasing new capital goods, which seems to me that primary residence does not qualify. I'm quite confused here: do we consider homes which are only used by their owners as investment, even if these homes are newly built?


Home construction is a form of investment, home purchase is not. There's an important macro difference between creating the capital asset (construction) and transferring it (purchase).

Regarding whether a newly built home occupied by its owner counts as investment— yes, because it is a capital asset that produces a stream of housing services. There's more detail on how this fits into GDP in this answer.

  • $\begingroup$ Thanks for your answer. Do you mean that creating capital assets is a form of investment but transferring is not? Thus, FedEx purchasing new trucks is not investment but truck assembling is a form of investment? $\endgroup$
    – xuhdev
    Jul 23 '16 at 18:09
  • $\begingroup$ When A buys a house from B, this is investment by A, but it is also negative investment by B of the same amount (the sale price), and so for the economy as a whole nets to zero. It might have a different net effect if A and B were in different countries, for example an existing house-boat being moved across the border $\endgroup$
    – Henry
    Jul 25 '16 at 7:17

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