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Mobility and mortgages: Evidence from the PSID

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  • Coulson, N. Edward
  • Grieco, Paul L.E.

Abstract

We use the 1999–2009 Panel Survey of Income Dynamics to estimate household move probabilities as a function of, among other things, current housing equity. The lock-in effect supposes that mobility decreases with the mortgage loan-to-value ratio, particularly as equity becomes negative. We find that while owners do move less than renters, the move probability increases as homeowners become underwater. The propensity to move out of state in particular increases dramatically for sand state homeowners who have negative equity. There is no lock in effect from negative equity.

Suggested Citation

  • Coulson, N. Edward & Grieco, Paul L.E., 2013. "Mobility and mortgages: Evidence from the PSID," Regional Science and Urban Economics, Elsevier, vol. 43(1), pages 1-7.
    • Handle: RePEc:eee:regeco:v:43:y:2013:i:1:p:1-7
    DOI: 10.1016/j.regsciurbeco.2012.10.004
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    References listed on IDEAS

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    More about this item

    Keywords

    Mobility; Underwater mortgages;

    JEL classification:

    • R3 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers

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