Many Americans Are Unable to Relocate for Jobs

[Jul 30, 2010.]

 

Fewer Americans are moving to other states to take work. That's because many people can't sell homes that are underwater on mortgages so they can relocate. Even if they were able to sell their homes, many of these people would end up worse off financially.

For the year ended in March 2009, only 1.6% of Americans moved between states, according to the Washington Post. "Overall, interstate migration has reached its lowest point since World War II," William H. Frey, a Brookings Institution demographer, told the Washington Post.

Threat to Economic Recovery

Less mobility among Americans could threaten the nation's economic recovery, which has many economists worried. There are a lot of homeowners who have been unemployed for a long period of time and are barely hanging onto their homes. For many of these people the threat of foreclosure is very real.

When Moving Is Not an Option

If you are currently are employed and are making monthly payments on a mortgage with no problem, then you can probably sit tight and wait for the economy to improve. It's when you can't find a job and are really struggling with mortgage loan payments that you may have to rethink plays to sell. Here's why it can be to your benefit to sell a house even if you have lost a lot of value:

• It's better to sell your home and break even, or even take a small loss than end up in foreclosure, which wrecks your credit score. You also take a huge financial hit if you just stop paying on a mortgage but stay in the house.


• You might persuade your mortgage lender to agree to a short sale. This would allow you to sell your home for less that what is owed on the home mortgage. Check with an account to determine what your tax bill would be for the amount of any forgiven debt.


• Selling could help you get a fresh start in a new place. You could rent a place and wait a while before looking for a home you could afford to buy.


• If you still have some equity in your home, selling could allow you to cash out now and avoid taking future hits if property value decline more.

Do You Want That Job?

Taking a job in another state is a big step, especially if you are planning to move with a family. If necessary, talk with a housing counselor about all the options that are available if you are having trouble keeping up with monthly payments on a mortgage. But avoid passing up a great job opportunity just because of a mortgage.

 

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About Author:

Francine L. Huff is a freelance journalist and the author of The 25-Day Money Makeover for Women. She has appeared on a variety of TV and radio shows.