You’re correct that home ownership => higher unemployment is oversimplification. There are issues of how strong is the correlation and the unproved suggestion of causation. For example, it might mean that high employment and high activity centers have higher cost of living (Like S.F. and N.Y.) and therefore smaller percent of home ownership. Maybe the population skews younger. I am assuming that the original statistics are correct (i.e. metropolitan areas with higher home ownership have higher unemployment).
Nevertheless, the article suggests that super high home ownership is not necessarily macro economically desirable.
Being a closet liberal/tree huger, I used think that mortgage interest deduction is a huge giveaway for consumption of the affluent even though I personally benefit from it. While there are social benefits and economical benefits for home ownership, I think a community is only marginally better off for having $1 million home owners vs. $250K home owners. It makes no more sense to have interest deductible above, say the greater metropolitan area medium, then have interest on any consumer spending deductible.
Of course, the current crash has taught me that policy that encourage the poor owning homes may not be in the best interest of the target group. This is similar to the poor saving for 401k or kids college while carrying credit car debt due all the “save for retirement/college” we drum into everyone.
At these times I can be momentarily persuaded that government simply does not possess the finesse required to craft an effective policy.
