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Negative home equity reduces household mobility: Evidence from administrative data

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  • van Veldhuizen, Sander
  • Vogt, Benedikt
  • Voogt, Bart

Abstract

We investigate the impact of negative home equity on household residential mobility. We employ a unique administrative panel data set covering nearly the whole population of Dutch homeowners. The data contains a large set of personal characteristics of more than 2,000,000 homeowners. We identify the effect of negative home equity on mobility by exploiting the quasi-exogenous regional variation of the unanticipated housing market shock during 2008–2012, in which real house prices declined by 25%. Households plunging into negative home equity due to unanticipated declining house prices are 21% less likely to move compared to households upholding positive home equity.

Suggested Citation

  • van Veldhuizen, Sander & Vogt, Benedikt & Voogt, Bart, 2020. "Negative home equity reduces household mobility: Evidence from administrative data," Journal of Housing Economics, Elsevier, vol. 47(C).
    • Handle: RePEc:eee:jhouse:v:47:y:2020:i:c:s1051137717302528
    DOI: 10.1016/j.jhe.2018.06.010
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    2. Cindy Biesenbeek, 2022. "The Effect of Unemployment on Interregional Migration in the Netherlands," Working Papers 753, DNB.
    3. Lu Zhang, 2019. "Do house prices matter for household consumption?," CPB Discussion Paper 396, CPB Netherlands Bureau for Economic Policy Analysis.
    4. Lu Zhang, 2019. "Do house prices matter for household consumption?," CPB Discussion Paper 396.rdf, CPB Netherlands Bureau for Economic Policy Analysis.

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    More about this item

    Keywords

    Household mobility; Negative home equity; LTV; Administrative data;
    All these keywords.

    JEL classification:

    • D10 - Microeconomics - - Household Behavior - - - General
    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household

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