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It Is Hard to Buy a House If You Don’t Have a Job

One of the biggest challenges to a housing recovery is the current rate of unemployment. It is obvious that a person without a job can’t get a mortgage. An additional impact is that many people who are currently employed are afraid to commit to buying a home because of the uncertainty of the job they do have.

It is easy to understand their concern when you read the Bureau of Labor Statistics news release on 2009 unemployment which was released March 3. In the report, it was stated:

All 50 states and the District of Columbia posted statistically significant unemployment rate increases in 2009.

If we look at the unemployment rate by county over the last four years, we see a very unsettling story. Below is a visual depiction of the increase. The darker the area the higher the unemployment rate.

How does this compare to previous times of high unemployment?

Below is a graph from Calculated Risk showing the percentage of job loses compared to challenging times of the past:

When can we expect things to get better?

IHS Global Insight just came out with their perspective:

As for the unemployment rate, it is encouraging that there was no setback in February. This improves the odds that last November’s 10.1% level will prove to be the peak, and that unemployment can edge down a little further by the end of this year. But we continue to believe that progress in bringing down unemployment will be slow, as previously discouraged workers return to swell the labor force.

What does this mean to you?

It could be difficult to sell your house if you live in an area of job instability. If you must sell, you may have to make the price so compelling that the buyer is more concerned about losing the opportunity to purchase it then they are worried about the chance they may lose their job.

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