Housing decline likely causing lasting structural unemployment

Via Megan McArdle's blog:

Many Americans are mired in a housing gridlock: They can't afford to sell their homes because property values have fallen, causing millions of people to owe more on their homes than they are worth. And, many can't move to take new jobs until they sell their homes. ...

Fewer Americans are moving now than in any year since 1962, when the population was 120 million smaller.

"The economy is playing havoc, since property values have dropped significantly in the last few years," Hicks said. "Many people simply cannot just pick up and move. They have a home they have to sell first.

Megan comments:

One of the justly celebrated strengths of the United States economy is its labor mobility. By this account, at least, our housing market has basically destroyed that critical asset. A recession like this is the worst time to lose your labor mobility.