I never thought of divorce as a luxury good but it makes sense.

Both marriages and dissolutions are tied to unemployment, University of Arizona’s Schaller found in a May 2012 paper. Each one percentage point increase in the jobless rate is associated with a 1.5 percent decrease in the marriage rate and 1.7 percent drop in the divorce rate, she calculated.

Divorce and Real Estate

I knew divorce was an important source of household formation – what used to be one household now becomes two – but didn’t put together that the economic rebound would increase divorce rates.

“Separations and divorce often create additional housing demand by creating two households when there was one,” said David Crowe, chief economist at the National Association of Home Builders in Washington.

Arizona Divorce Above 2008

In Florida and Arizona, two states that saw home-price gains after severe drops, divorce rates rebounded in 2011 to above 2008 levels.

Interestingly, the buyer of the last house I sold was in the process of getting divorced and wanted to buy a home and start over.

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