An end to the recession is unlikely to bring any improvement in hiring in the U.S., a new paper from the Federal Reserve Bank of Kansas City argues.

via Unemployment Rate Could Take Decade to Return to 6% – Real Time Economics – WSJ.

Well that’s not good news for housing here in Denver, though this article is national not regional.   Does anyone care if the recession is over if employment does not improve.

The immediate issue is that housing there remains a affordability gap in the Denver market.  Housing can’t take off unless rates drop or pay rolls rise to meet the cost.  If rates rise or pay rolls continue to drop there’s an excellent chance that foreclosures will continue as prices will drop.  That’s an ugly scenario.

Many people aren’t actually unemployed.  They are self-employed and earning an income.  That creates a whole new problem.  They need a two year history of stable self-employed earnings to utilize financing to participate in the market.  That’s hard to prove for the newly self-employed.

The work force seems to be moving towards contract and self-employed labor that is considerably more unstable than W-2 labor.   Fannie, Freddie, and Banks are not in a position to create mortgage products to address the demand that this change is creating.

For housing this is all pretty dim news.  For the economy, having a jobless recovery will probably be connected to a non-recovery in housing.  Can the economy really recover with this sector in tow?