dutchess county and long island. indeed, we recently documented the severity of problems on long island in our facts and trends publication. moreover, new jersey had non - prime mortgage activity closer to the national average and now has more delinquencies and foreclosures than is the case for much of the region. as the uneven pattern of nonprime lending suggests, the region is hardly uniform. the housing section fared better in upstate new york than it did in much of the region during the recession. in fact, the housing boom and bust largely bypassed upstate new york, where construction activity is a relatively small part of the overall economy. relative to upstate new york, most areas in downstate new york and northern new jersey more closely tracked the national cycle. sales activity and home prices ramped up during the housing boom, but then dropped sharply. more recently – over the past year – home sales and prices in the region have followed different paths. home prices have generally stabilized across upstate new york, with some parts, such as buffalo, rochester and syracuse, even experiencing price increases over this period. however, home prices have continued to decline in the greater new york and new jersey area. by contrast, the number of home sales have generally increased throughout the region over the past year. but the pattern has been erratic because of various policy changes. in particular, the introduction, initial expiration and subsequent extension of the home buyer tax credit introduced volatility as it boosted, slowed and then boosted sales again. with the final expiration of this tax credit, the recent rise in home sales across new york and northern new jersey may well be short - lived. regional housing trends : focus on new york city i ’ ll end with a few remarks about new york city ’ s housing market – a very large market that stands out as unique in many respects. let me remind you of some of these key differences : compared with the rest of the region, and with the rest of the country, new york city has an exceptionally large share of rental housing : 67 percent of homes citywide versus 33 percent for the united states. the market is dominated by multi - family structures, especially in manhattan and the bronx. when these units are owner - occupied, they are more likely to be co - ops than condominiums, and, thus, to have comparatively low leverage rates. new york city has very high housing prices and long construction lags. since the number of homes cannot adjust quickly, rising

substantially above the nation. since we last met, employment in new jersey has expanded, and while that growth has been quite modest, it is an encouraging sign. in puerto rico, employment reports continue to give mixed signals, showing a see - saw pattern that has yet to add up to a strong rebound. despite these employment gains, unemployment in the region remains painfully high. in august, new york city ’ s and new jersey ’ s rates were very close to the national jobless rate of 9. 6 percent. the rate for new york state, which has been improving since the first quarter, is noticeably lower at 8. 3 percent. puerto rico, which has had much higher unemployment than the mainland for the past several decades, saw a modest decline in its jobless rate, but at 15. 6 percent is still showing little evidence of a recovery. regional housing trends in new york and new jersey we focus on housing at today ’ s briefing because it represents the most important asset that many households own, provides a substantial number of high - wage jobs and is often a key driver of regional as well as national business cycles. i ’ ll start with a key observation : during this recession, the housing sector contributed less volatility to the regional economy than it did in much of the nation. we have, of course, seen painful losses of homes, construction jobs and housing equity in new york and northern new jersey. this pattern can be seen quite directly in the construction sector, where many jobs were created during the housing boom, but then were lost as the housing market deteriorated. however, our housing markets tend to be less influential in our economy because we are a relatively mature region. that is, we are not adding population as rapidly as some other parts of the country, so housing construction – which tends to be very cyclical – and associated purchases account for a smaller share of aggregate activity here than it does in faster growing regions. in addition, much of our region was spared the worst effects of the non - prime mortgage boom and bust. there was generally lower penetration of nonprime loans into our housing markets, and in general, our region shows better performance, with fewer delinquencies and foreclosures. this pattern was particularly true across upstate new york. however, as can be seen on the new york fed ’ s u. s. credit conditions maps, there are significant pockets of housing distress around the greater new york city metro area, especially in communities in the bronx,