In a post today in Calculated Risk, there is an interesting graph that tracks the jobless rate and housing prices. And the graph shows what most of us already knew. Housing prices increase during periods of high employment and decrease when jobs are scarce. It‘s really a pretty simple concept, when people have more money, they drive up prices of goods, services, and housing.
What this tells us is that we’re not likely to see stabilization in the housing market until the jobless rate shows a significant decline. And that isn’t likely to happen until next year at the earliest. Take a look at the graph and you’ll see the correlation as well as the dramatic curve that both unemployment and housing prices have been on for the past year.
Graph:Calculated Risk Blog/Housing Prices & Unemployment Rate
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