Do housing prices make it more likely that a couple will divorce? Maybe. According to an interesting new study published in the American Economic Review, it depends on whether you own your home. The study found that when house prices decline, people who own their homes are less likely to get divorced, whereas people who rent are more likely to get divorced. The researchers used educational status as a proxy for homeowners and renters because college graduates are more likely to be homeowners than high school drop outs. The study predicted that a 10% drop in house prices would lead to a 20% increase in divorce rates amongst renters, but a 29% reduction amongst homeowners. The likely explanation is that declining house prices tend to trap an unhappy couple in their homes. On the other hand, couples who are renters are more likely to find two affordable apartments if they divorce. This study corroborates similar findings in the United Kingdom. If the findings in this study are true, it may have interesting consequences for public policy. Policies to speed up the foreclosure process and restore liquidity in the housing market may actually increase the divorce rates.