Housing Busts and Household Mobility

Fernando Ferreira, Joseph Gyourko and Joseph Tracy

No 14310, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Using two decades of American Housing Survey data from 1985-2005, we estimate the impact on household mobility of owners having negative equity in their homes and of rising mortgage interest rates. We find that both lead to lower, not higher, mobility rates over time. The impacts are economically large, with mobility being almost 50 percent lower for owners with negative equity in their homes. This does not imply that current worries about defaults and owners having to move from their homes are entirely misplaced. It does indicate that, in the past, the lock-in effects of these two factors were dominant over time. Our results cannot simply be extrapolated to the future, but policy makers should begin to consider the consequences of lock-in and reduced household mobility because they are quite different from those associated with default and higher mobility.

JEL-codes: R0 R21 R23 (search for similar items in EconPapers)
Date: 2008-09
New Economics Papers: this item is included in nep-geo, nep-mig and nep-ure
Note: PE
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (29)

Published as Ferreira, Fernando & Gyourko, Joseph & Tracy, Joseph, 2010. "Housing busts and household mobility," Journal of Urban Economics, Elsevier, vol. 68(1), pages 34-45, July.

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Journal Article: Housing busts and household mobility (2010)
Working Paper: Housing busts and household mobility (2008)
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