What does residential fixed investment primarily consist of?

Residential fixed investment primarily consists of the purchase of new homes and apartment buildings because it reflects expenditures on the construction of residential structures, which are considered long-term investments in the economy. This category captures the value of new residential properties that are constructed, providing an essential component of overall economic activity since housing is a foundational aspect of both personal wealth and community infrastructure.

While additions to existing structures and renovations are related to housing investment, they fall under broader categories of home improvements and are not the primary focus of residential fixed investment. Investment in machinery and equipment pertains to business fixed investment rather than residential, further distinguishing its purpose in economic terms. Thus, focusing on the purchase of new homes and apartment buildings directly reflects the significant role that residential construction plays in the economic metrics related to fixed investment.