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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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    1. Jakob Roland Munch & Michael Rosholm & Michael Svarer, 2006. "Are Homeowners Really More Unemployed?," Economic Journal, Royal Economic Society, vol. 116(514), pages 991-1013, October.
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    9. Shushanik Hakobyan & John McLaren, 2016. "Looking for Local Labor Market Effects of NAFTA," The Review of Economics and Statistics, MIT Press, vol. 98(4), pages 728-741, October.
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    Citations

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    Cited by:

    1. Andrea Morescalchi, 2016. "The Puzzle Of Job Search And Housing Tenure: A Reconciliation Of Theory And Empirical Evidence," Journal of Regional Science, Wiley Blackwell, vol. 56(2), pages 288-312, March.
    2. Bricker, Jesse & Bucks, Brian, 2016. "Negative home equity, economic insecurity, and household mobility over the Great Recession," Journal of Urban Economics, Elsevier, vol. 91(C), pages 1-12.
    3. Foote, Andrew, 2016. "The effects of negative house price changes on migration: Evidence across U.S. housing downturns," Regional Science and Urban Economics, Elsevier, vol. 60(C), pages 292-299.
    4. Siddharth Kothari & Itay Saporta Eksten & Edison Yu, 2013. "The (Un)importance of Geographical Mobility in the Great Recession"," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 16(3), pages 553-563, July.
    5. Cunningham, Chris & Reed, Robert R., 2013. "Negative equity and wages," Regional Science and Urban Economics, Elsevier, vol. 43(6), pages 841-849.
    6. Semih Tumen & Tugba Zeydanli, 2014. "Home Ownership and Job Satisfaction," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 117(1), pages 165-177, May.
    7. Sander van Veldhuizen & Benedikt Vogt & Bart Voogt, 2016. "Negative Home Equity and Household Mobility: Evidence from Administrative Data," CPB Discussion Paper 323, CPB Netherlands Bureau for Economic Policy Analysis.
    8. repec:eee:jhouse:v:37:y:2017:i:c:p:29-41 is not listed on IDEAS
    9. repec:eee:juecon:v:109:y:2019:i:c:p:41-65 is not listed on IDEAS
    10. Chan, Sewin & Haughwout, Andrew & Tracy, Joseph, 2015. "How Mortgage Finance Affects the Urban Landscape," Handbook of Regional and Urban Economics, in: Gilles Duranton & J. V. Henderson & William C. Strange (ed.), Handbook of Regional and Urban Economics, edition 1, volume 5, chapter 0, pages 987-1045, Elsevier.
    11. Bloze, Gintautas & Skak, Morten, 2016. "Housing equity, residential mobility and commuting," Journal of Urban Economics, Elsevier, vol. 96(C), pages 156-165.
    12. J.W.A.M. Steegmans & W.H.J. Hassink, 2015. "Decreasing house prices and household mobility: An empirical study on loss aversion and negative equity," Working Papers 15-12, Utrecht School of Economics.
    13. Andersson, Fredrik & Mayock, Tom, 2014. "How does home equity affect mobility?," Journal of Urban Economics, Elsevier, vol. 84(C), pages 23-39.

    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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