PRACTICE 3. ORGANIZING PARAGRAPH ACTIVITIES. (6B)

 IN CLASS:

It has been argued that rises in the rate of homeownership can increase the rate of unemployment. Homeownership appears to make people more reluctant to move to find work, as seen when contrasting countries such as Spain, where we find high ownership but also high unemployment, and Switzerland, a country in which the opposite happens. However, other factors have been proposed, such as liquidity of housing markets. That is, we could say this theory is still controversial.

6B:

The recession of 2008-9 gave support to theory in some US states, such as California, Michigan and Florida. These states had a major housing boom in the 1990s but after the recession, the rate of house moving fell sharply. One factor to take into account when understanding this is the number of households in negative equity, which means selling a house may end at loss. To sum it up. high rates of ownership may deepen a recession if labour is more static.