Recovery roadblock? Mortgage burdens keep job seekers from moving
In what could end up becoming a vicious cycle of economic hurt, struggling homeowners who can’t relocate for new jobs may stymie employers’ long-range growth.
So says a report from outplacement consultancy Challenger, Gray & Christmas Inc., which finds that only about 7.5% of job hunters who found new positions ended up moving to a new home for work in the latter half of 2011.
Since the end of 2009, the quarterly relocation rate has averaged about 7.9%. That’s half the pre-recession rate of 15.7% and lower than the 13.2% of candidates willing to uproot during the recession.
With masses of homeowners still bound to mortgages or trapped in underwater homes, those applying for jobs are increasingly inclined to stay put rather than abandon their properties.
“Picking up stakes remains a last resort for the majority of job seekers, many of whom are unwilling to take a loss on the sale of a home for a position that may or may not last,” John A. Challenger, chief executive of the consultancy, said in a statement. “For now, many people are stuck.”
And with most employers declining to cover employees’ relocation costs — and even fewer chipping in to lessen the impact of selling a home with a depressed value — there’s even less incentive for job seekers to take a chance on a new locale.
The lack of mobility, Challenger said, could be “one of the biggest obstacles to economic recovery.”
“Eventually, as the economy continues to improve, employers will exhaust the local talent pool,” he said. “If job seekers are still unable or unwilling to move at that point, it is likely to stall companies’ expansion plans and ultimately stall economic growth.”
