Employment always will be the most important factor in all non-vacation housing markets. More jobs translate into more people who need housing. When housing needs can not keep up with demand, prices rise. Just as surely, prices will fall in a region with a net loss of jobs, which translates to an over supply of housing.

This simple economics lesson in housing supply and demand is even more apparent when one understands that the demand part of the equation is driven so robustly by employment.

The other basic of economics at work here is that interest rates and unemployment rates tend to have an inverse reaction. In other words, rates are usually lower during periods of high unemployment while they rise during times of low unemployment. This one is great for us because it means people tend to buy more often when rates are higher so we can refinance them when the economy slows, unemployment goes up and interest rates go down!

So next time you hear "these higher interest rates will hurt the market," you will know differently. most of our country's biggest real estate booms have happened during times of higher interest rates thanks to jobs!

Tomorrow... where to get the facts about employment.