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This article from Calculated Risk, shows the strong correlation between new housing starts and the unemployment rate. This recession differs from all but one of our previous recessions which were triggered by declines in new housing construction and the recoveries which were also led by rising demand for new homes. Our current recovery is being held back by weakness in the housing market. High unemployment, high inventories of unsold foreclosures and stock market volatility, is keeping new housing starts down despite the Fed's efforts to maintain low mortgage interest rates.