Housing Turnover and Employment Change

Abstract As the economy strengthens and employment increases, the relevance of how employment changes affect housing turnover becomes more apparent. Using a varying parameter model and a large cross-section of housing market data, this study demonstrates the complexity of the relationship between housing turnover and employment change. In most cases, the expected direct relationship exists; that is, employment growth spurs the housing market. However, in cases where potential homebuyers are facing higher uncertainty, such as a recessive economy or a market with foreclosures, employment growth may not positively affect housing turnover. The results emphasize the importance of assessing individual housing market conditions in an effort to understand the economic impacts of employment change.