House lock has prevented some homeowners from moving for better jobs, but the problem isn’t affecting the nation’s overall unemployment rate in a substantial way.
That’s the conclusion of a study authored by the Federal Reserve Bank of Chicago, which found scant evidence of a link between geographic immobility and a national unemployment rate that reached 9.2 percent in June. The study was released Wednesday.
Using census data, the economists compared state-to-state migration rates among both homeowners and renters and found neither group had veered from historical recession rates. “We find that homeowner and renter migration rates fell roughly in tandem,” Fed vice president and advisor Daniel Aaronson wrote. “The difference is economically small.”
Some observers had believed that house lock, the economic malady in which homeowners are reluctant or unable to sell their homes because of diminished values, had kept some workers from relocating for new jobs and contributed to the unemployment rate.
But Aaronson wrote that differences in movement were nearly identical across markets in a variety of economic conditions. In the data unearthed in the Survey of Income and Program Participation, markets battered by the recession showed the same migration patterns as those that faced less tumult.
“There is little empirical evidence that house lock has been an important driver of the recent high unemployment rate,” he said.