By pushing more people into housing through incentives the Federal government may be aggravating the unemployment problem.

In good markets housing is illiquid. In a real estate depression a house is like a heavy anchor.  The inability to be mobile restricts job opportunities by forcing homeowners to remain in a single location. Renting allows mobility and the flexibility to respond to better job opportunities quickly.

With so many homeowners underwater there is a further incentive not to sell a house in order to avoid the recognition of the capital loss. Many would want to avoid the pain of coming up with cash at a closing.

The housing crash has destroyed home equity values even for those who can afford the homes they occupy, and it puts pressures even on them to avoid moving to better jobs in distant locations.