States with higher homeownership rates have higher unemployment rates, according to this research report commissioned by NMHC and conducted by Professors Richard Green of the University of Wisconsin and Patric Hendershott of Ohio State University. The report finds that homeownership may constrain labor mobility and thus lead to higher unemployment. Specifically, the higher costs of selling a house, compared to vacating an apartment, make unemployed homeowners reluctant to move to find a job.
As the first research to carefully explore this important potential linkage between homeownership and unemployment in the U.S., their findings are particularly significant when one considers the costs to society associated with unemployment. By showing that rental housing may improve the ability of workers to adjust to changing labor market conditions and in doing so promote national economic growth, this research underscores the need for a better balance between rental and for-sale housing in our national housing policy debates.