Since 1971, unemployment downturns have ALWAYS reversed when the new housing market reversed and moved upward.
That was not true prior to 1971 but we changed many things in that year … and chances are (minus available data) that this relationship was probably true prior to 1971 as well although manufacturing played a very major role in your weekly paycheck — back when things were Made in America.
USA Housing and Employment Relationship
Reality Check: the Ownership Society is kaput. The middle class is broke. This trend has been in a gradual downward spiral since 1980 when real annual income growth for the lower middle class stalled. It has remained stalled ever since. Still, the middle class was healthy enough and fluid enough that it still thrived as long as there were jobs. That too stalled in the late 1990s when the percentage of eligible Americans employed began constantly and steadily decreasing every year since 1998.
The Question: Do we need to build more houses? Haven’t we really been trading up for almost 40 years … and now we need to trade down? Maybe? If so then … bad news … or can we turn the question and ask ‘what else could we build (or replace)?’.