As we've mentioned before in this blog, there is an important link between the U.S. housing market and the overall economy – with real estate activity responsible for more than 10 percent of economic growth in 2012. And, according to outplacement firm Challenger, Gray & Christmas, Inc., there could also be an important link between the improving real estate industry and the country's unemployment rate.
The firm recently announced its prediction that there will be a surge of people relocating as more homeowners are lifted out of negative equity, reports DS News. The idea here is that as home prices increase, people will be able to sell their properties and move to places where the job market is more inviting.
In 2012, for example, 13.3 percent of job seekers working with the outplacement firm relocated for new positions each quarter. This is up from 11.7 percent in 2011 and 10 percent in 2009 and 2010.
According to data from real estate research company Zillow, 1.9 million homeowners were lifted out of negative equity in 2012. If Challenger, Gray & Christmas's prediction is correct, there is a chance that a number of these people will move to a new area in pursuit of a job.
"One factor that has kept unemployment rates high has been the inability of underwater homeowners to relocate for employment opportunities. With home prices bouncing back, even those who may now simply break even on a home sale might consider moving to a region where jobs are more plentiful," said the firm's CEO, John Challenger, in a statement. "This could spark a more rapid decline in the unemployment rate over the next year."
As the housing market continues to improve and spring – one of the busiest times of the year for the industry – approaches, there is a good chance that more people will begin buying and selling homes. It's important, as always, for lenders to ensure that borrowers can stay on top of their monthly payments, and they can do so by investing in loan management software.