Many analysts have adopted the working hypothesis that this decline reflects a type of “discouraged worker” effect, albeit one that is not captured in the standard statistical series attempting to measure that phenomenon. Presumably, many of the people who exited the workforce in the face of poor employment prospects now stand ready to resume competing for jobs as the market improves.
To date, house prices have fallen by nearly one-third from their peak (chart 23), pushing home equity as a share of personal income to its lowest level on record (chart 24) and wiping out $ trillion of housing equity.