Weak Housing Market Could Weigh Down Job Growth

Posted on March 12, 2007

Last year the housing market gave a boost to the overall job market. This year that's not the case at all. MSNBC.com reports that the housing market is already weighing down job growth.

Since the middle of last year, a downturn in the U.S. housing market has taken its toll on a wide group of people and companies, clobbering homebuilders, condo flippers, borrowers with weak credit, lenders who oversold loans, and just about anyone with a home for sale.

Now the housing slump is hitting yet another target: housing-related jobs, a list that includes everyone from the people who build and sell houses to makers of appliances and furnishings.

That's a sharp contrast to the height of the housing boom in 2005-06, when the industry was responsible for creating some 25,000 to 50,000 new jobs every month, according to Mark Zandi, chief economist at Moodys.com.

And it could get much worse. Moodys.com's chief economist Mark Zandi also gave MSNBC.com this grim forecast.

"In the recent months it's been laying off workers at a pace of 25,000 to 50,000 per month," he said. "And I think the next couple of quarters we'll start seeing job losses of between 50,000 and 75,000 per month. ... I think the housing market is going down a whole other notch."

The MSNBC article also notes that it was a real estate downturn that brought on the recession of 1990-91. Hopefully it won't get that bad in 2007/2008.

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