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A micro view on home equity withdrawal and its determinants: Evidence from Dutch households

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  • Ebner, André

Abstract

For most households, home ownership is the largest wealth component that has become more accessible through innovation and deregulation in mortgage markets. This paper studies the factors driving home equity withdrawal (HEW) at the household level using Dutch survey data. In the Netherlands, house prices were growing fast and mortgage expenses are to a large extent tax deductible. Expectations and perceptions do seem to play an important role in HEW. Withdrawers tend to be more positive about house price developments and – although having lower income – less concerned about their future economic situation. HEW can have a significant impact on both households and the economy, with most of the equity released being reinvested in the housing sector and only a small share used to finance consumption expenditure.

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  • Ebner, André, 2013. "A micro view on home equity withdrawal and its determinants: Evidence from Dutch households," Journal of Housing Economics, Elsevier, vol. 22(4), pages 321-337.
  • Handle: RePEc:eee:jhouse:v:22:y:2013:i:4:p:321-337
    DOI: 10.1016/j.jhe.2013.10.001
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    5. Viola Angelini & Peter Simmons, "undated". "Housing Debt and Consumption," Discussion Papers 11/20, Department of Economics, University of York.
    6. Madis Aben & Merike Kukk & Karsten Staehr, 2012. "Housing Equity Withdrawal and Consumption Dynamics in Estonia 2002-2011," Research in Economics and Business: Central and Eastern Europe, Tallinn School of Economics and Business Administration, Tallinn University of Technology, vol. 4(1).
    7. Dean, Jason & Steele, Marion, 2022. "Income decline, financial insecurity, landlord screening and renter mobility," Regional Science and Urban Economics, Elsevier, vol. 95(C).
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    More about this item

    Keywords

    Home equity withdrawal; Home equity based borrowing; Housing market; Mortgages; Expectations;
    All these keywords.

    JEL classification:

    • D1 - Microeconomics - - Household Behavior
    • D9 - Microeconomics - - Micro-Based Behavioral Economics
    • E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment
    • E4 - Macroeconomics and Monetary Economics - - Money and Interest Rates
    • G2 - Financial Economics - - Financial Institutions and Services
    • R2 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis

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