This paper examines the effects of the housing boom of the early 2000s on unemployment in U . S . metropolitan areas. A region’s share of housing units built between 2000 and 2006 has no effect on unemployment prior to the start of the Great Recession, but the extent of a region’s housing boom increases unemployment in over one‐half of the months analyzed during and immediately following it. Regression results based on a cluster analysis of metropolitan areas indicate that regions characterized by high growth rates of construction, retail, and hospitality employment during the early 2000s were hit particularly hard by the recession.