Will the housing rebound crush the job market? | Pound Ridge Real Estate

For the past few years, economists have been waiting for the housing market to rebound so the job market can finally — crash? Wait, no. It’s the opposite. Right?

On Friday, we’ll get the latest look at how the job market is doing. Hiring is improving, but the unemployment rate has stayed stubbornly high. The go-to explanation among economists has been the weak housing market. Where are all those construction workers going to find work? Nursing? (That’s actually a pretty good idea.)

Housing prices are jumping again, and some people are even saying there’s a new bubble. We’ve pointed out you shouldn’t expect the economy to come roaring back just because the housing market is. But two economists are taking an even more extreme stance: that a good real estate market, where more people buy houses instead of rent, will throw more people out of work.

The paper by David Blanchflower of Dartmouth and Andrew Oswald of the University of Warwick titled “Does High Home-ownership Impair the Labor Market?”, has been out for a month or so but was only published by the National Bureau of Economic Research on Monday. Among the findings:

States with more homeowners, fewer renters, tend to have higher unemployment rates.

It’s not the homeowners that tend to make up the majority of the unemployed.

So we really don’t know why this happens. But it does, so there.

Also, maybe homeowners are less likely to start new businesses, because property makes people lazy I guess.

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