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Household mobility over the Great Recession: evidence from the U.S. 2007-09 Survey of Consumer Finances panel

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  • Brian K. Bucks
  • Jesse Bricker

Abstract

This paper uses data from the 2007-09 Survey of Consumer Finances panel to examine U.S. households' decisions to move and the role of negative home equity and economic shocks, such as job loss, in these decisions. Even over this period of steep house price declines and sharp recession, we find that most moves were prompted by standard reasons. The recession's effects are nonetheless apparent in the notable fraction of homeowners who moved involuntarily due to, for example, foreclosure. Many involuntary moves appear to stem a combination of negative home equity and adverse economic shocks rather than negative equity alone. Homeowners with both negative equity and economic shocks were substantially more likely to have moved between 2007 and 2009 and to have moved involuntarily. The findings suggest that, analogous to the double-trigger theory of default, the relationship between negative equity and household mobility varies with households' exposure to adverse shocks.

Suggested Citation

  • Brian K. Bucks & Jesse Bricker, 2013. "Household mobility over the Great Recession: evidence from the U.S. 2007-09 Survey of Consumer Finances panel," Finance and Economics Discussion Series 2013-53, Board of Governors of the Federal Reserve System (U.S.).
  • Handle: RePEc:fip:fedgfe:2013-53
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    References listed on IDEAS

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    1. Raven Molloy & Christopher L. Smith & Abigail Wozniak, 2011. "Internal Migration in the United States," Journal of Economic Perspectives, American Economic Association, vol. 25(3), pages 173-196, Summer.
    2. Ferreira, Fernando & Gyourko, Joseph & Tracy, Joseph, 2010. "Housing busts and household mobility," Journal of Urban Economics, Elsevier, vol. 68(1), pages 34-45, July.
    3. Jesse Bricker & Brian K. Bucks & Arthur B. Kennickell & Traci L. Mach & Kevin B. Moore, 2011. "Surveying the aftermath of the storm: changes in family finances from 2007 to 2009," Finance and Economics Discussion Series 2011-17, Board of Governors of the Federal Reserve System (U.S.).
    4. Foote, Christopher L. & Gerardi, Kristopher & Willen, Paul S., 2008. "Negative equity and foreclosure: Theory and evidence," Journal of Urban Economics, Elsevier, vol. 64(2), pages 234-245, September.
    5. Chan, Sewin, 2001. "Spatial Lock-in: Do Falling House Prices Constrain Residential Mobility?," Journal of Urban Economics, Elsevier, vol. 49(3), pages 567-586, May.
    6. Schulhofer-Wohl, Sam, 2012. "Negative equity does not reduce homeowners’ mobility," Quarterly Review, Federal Reserve Bank of Minneapolis, issue Feb, pages 1-17.
    7. Neil Bhutta & Jane K. Dokko & Hui Shan, 2010. "The depth of negative equity and mortgage default decisions," Finance and Economics Discussion Series 2010-35, Board of Governors of the Federal Reserve System (U.S.).
    8. David Genesove & Christopher Mayer, 2001. "Loss Aversion and Seller Behavior: Evidence from the Housing Market," The Quarterly Journal of Economics, Oxford University Press, vol. 116(4), pages 1233-1260.
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    10. Engelhardt, Gary V., 2003. "Nominal loss aversion, housing equity constraints, and household mobility: evidence from the United States," Journal of Urban Economics, Elsevier, vol. 53(1), pages 171-195, January.
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    Cited by:

    1. Berger, Lawrence M. & Collins, J. Michael & Smeeding, Timothy M., 2015. "Exiting or retaining owner-occupied housing in the United States 1999–2009: How do social programs matter?," Children and Youth Services Review, Elsevier, vol. 57(C), pages 112-126.
    2. Chan, Sewin & Haughwout, Andrew & Tracy, Joseph, 2015. "How Mortgage Finance Affects the Urban Landscape," Handbook of Regional and Urban Economics, Elsevier.
    3. Bloze, Gintautas & Skak, Morten, 2016. "Housing equity, residential mobility and commuting," Journal of Urban Economics, Elsevier, vol. 96(C), pages 156-165.

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