Unemployment was 5.8% in July 2008 and 6.1% in August 2008. Housing starts were 923,000 in July 2008 and 844,000 in August 2008.
Housing starts are now at 872,000. And unemployment is 7.8%. If you prefer other numbers like employment to population, or U-6, then things are much worse.
It’s not housing! It’s NGDP, and it always has been.
With more NGDP we could be at 6% unemployment, even if we were just building 900,000 houses per month.