The rate of employment growth began to decline in 2001. After averaging 3.5 percent per year between December 1994 and December 2000, the rate slowed to 2.8 percent per year between December 2000 and December 2002 -- slower, but still a healthy rate. During the period December 2002 to December 2004, however, the rate fell to 1.3 percent per year, or about 38,000 new jobs per year. Since the end of 2002, employment growth has been slower than the estimated growth rate for the adult population (2.2 percent per year). The employment-to-population ratio has therefore fallen and the unemployment rate has increased.
Also, between 2002 and 2004, the level of housing affordability was relatively flat. Improved affordability had contributed to housing demand during the second half of the 1990s and this source of stimulus is now absent, although short-term variations in interest rates prompt short-term changes in sales figures. However, the period of large improvements in affordability and large increases in sales is over.