Wednesday, April 8, 2009
Unemployment & the Poor Housing Market: Mutual Solutions?
It's actually possible that unemployment and the poor housing market may be at least partial solutions for each other. Consider the fact that if you are unemployed, along with many others in your area, it is likely that you will have to go somewhere else to find a good job. If you go somewhere else, you will have to get a home there. When you look for that home, you will be helped by the facts that home prices are depressed and interest rates are low. In order to move, you will have to go through the ordeal of selling your existing home, but it is likely that you have more equity in your current home than the amount you will need for a downpayment on your new home. That means that you will have some remaining capital as you start your new job in your new location. Having cash resources will allow you to furnish and remodel your new home as desired. Spending that money to get your new house ready will contribute to improving the economy, which will create more jobs and make more people able to afford a new house. In every transaction, someone spends money to get something he or she wants, and the seller of that product or service gets cash to do the same thing later on. Spending circulates cash and builds up the economy. Spending only cash that you already own builds up the economy more slowly than spending other people's money through loans and credit cards, but it is a lot safer in times like these.