With many people locked in homes by underwater mortgages, only 1.6 percent of Americans moved between states in a one-year period that ended in March 2009 — a labor stagnation not seen in half a century. Though household mobility has gradually declined for more than two decades, the recent sharp downturn has caused economists to worry that it could harm the already struggling recovery.

“In the past, people tended to move to where the jobs are,” said Assistant Treasury Secretary Alan B. Krueger, who oversees economic policy for the department. “Now it is necessary to have more of a strategy to move the jobs — and create new jobs — in areas where the people are.”

The labor migration rate is down sharply since the start of the economic downturn in 2007 and is just half the rate of a decade earlier, according to William H. Frey, a Brookings Institution demographer who has analyzed Internal Revenue Service and census data. “Overall, interstate migration has reached its lowest point since World War II,” Frey said.

This is part of the reason that, to take care of the long-term unemployment situation, the government will likely need to subsidize or create massive jobs programs in regions with the worst unemployment and housing problems — interior California, Nevada, Arizona, Michigan. Making Detroit the new home of green jobs is one example.

Home sales had increased precipitously in March and April as homebuyers rushed purchases to take advantage of the Obama administration’s homebuyer tax credit, which offered first-time buyers $8,000 and others $6,500. Effectively, March and April borrowed buyers from May and June, and therefore economists anticipated a steep decline.

You might wonder: Given that the tax credit ended at the end of April and mortgage applications have plummeted, shouldn’t sales have dropped more in May? Not really. The May numbers reflect completed sales — and mortgage applications and other paperwork takes some time to process. Though the tax credit ended, May’s numbers are still elevated, and June’s will be as well. That is why the softening of sales seems ominous and was unexpected.

“We are witnessing the ongoing effects of the home buyer tax credit, which we’ll also see in June real estate closings,” Lawrence Yun, NAR chief economist, explained in a released statement.

In 11 of the 20 cities, though, home prices increased year-on-year, and for the first time since December 2006, the two composites Case Shiller measures both made year-on-year gains.

Notably, two major Obama administration programs supporting house prices are at their end. The Federal Reserve’s initiative to buy up billions of dollars of mortgage-backed securities from Fannie Mae and Freddie Mac ended at the end of last month. And the first-time homebuyer’s tax credit expires on April 30. The sunset of those programs will dampen enthusiasm about a possible March or April uptick in prices.

And it is – sort of. Both candidates are talking, in general ways, about change and reform. But they’re not going a whole lot deeper, notes L.A. Land’s Peter Viles, who blogs on real estate for the L.A. Times.

From Viles:

We are in the middle of a historic housing downturn, and a rolling financial crisis that has already seen unprecedented levels of government intervention in the private sector. It’s quite possible the government will intervene further, perhaps with a sweeping solution to recapitalize struggling banks and take bad assets off their books. Sadly, we know very little about the thoughts of the two presidential nominees on how this rolling crisis should be handled, what they will do about it when they take office, and what level of government intervention they believe is appropriate. In anticipation of your comments, I fully understand that both candidates have talked about the need for new regulations and “reforms” of both Wall Street and the mortgage market. Good enough. That’s about preventing the next crisis. What about the one we’re in right now?

Let’s see if either side comes up with something substantive in the next few days.

It’s not likely, given the fear that saying anything could make the markets even more jittery. But also unlikely because there’s just no simple solution to this crisis.

It would be a bold move on the part of either candidate to take the lead on this.

Voters don’t need more bickering over failed policies or promises for reforms. They deserve to know, in detail, how each candidate might handle the biggest financial crisis facing the country since the 1920s, and the unprecedented level of government intervention in the private markets that is taking place because of it.