A working paper from the Boston Federal Reserve looks at the impact that underwater mortgages have on state-to-state migration. Since 2007, the number of homeowners underwater on their mortgages (the amount owed on a mortgage is more than the home is worth) has increased and migration across states has fallen. The study looked at Internal Revenue Service data and found that roughly 100,000 to 150,000 fewer individuals migrated between states each year. But the study found that this decreased mobility has a “negligible impact” on the unemployment rate. The study states that even if all those who could not move were unemployed, looked for jobs in another state, and found jobs in another state, the unemployment rate would decrease by at most .1% per year.
