Negative Equity Does Not Reduce Homeowners' Mobility
Some commentators have argued that the housing crisis may harm labor markets because homeowners who owe more than their homes are worth are less likely to move to places that have productive job opportunities. I show that, in the available data, negative equity does not make homeowners less mobile. In fact, homeowners who have negative equity are slightly more likely to move than homeowners who have positive equity. Ferreira, Gyourko and Tracy's (2010) contrasting result that negative equity reduces mobility arises because they systematically drop some negative-equity homeowners' moves from the data.
|Date of creation:||Jan 2011|
|Date of revision:|
|Publication status:||published as Sam Schulhofer-Wohl, 2012. "Negative equity does not reduce homeownersâ mobility," Quarterly Review, Federal Reserve Bank of Minneapolis.|
|Contact details of provider:|| Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.|
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350, Federal Reserve Bank of New York.
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418, Federal Reserve Bank of New York.
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Public Policy Discussion Paper
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- 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.
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