NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Housing Busts and Household Mobility

Fernando Ferreira, Joseph Gyourko, Joseph Tracy

NBER Working Paper No. 14310
Issued in September 2008
NBER Program(s):   PE

Using two decades of American Housing Survey data from 1985-2005, we estimate the impact on household mobility of owners having negative equity in their homes and of rising mortgage interest rates. We find that both lead to lower, not higher, mobility rates over time. The impacts are economically large, with mobility being almost 50 percent lower for owners with negative equity in their homes. This does not imply that current worries about defaults and owners having to move from their homes are entirely misplaced. It does indicate that, in the past, the lock-in effects of these two factors were dominant over time. Our results cannot simply be extrapolated to the future, but policy makers should begin to consider the consequences of lock-in and reduced household mobility because they are quite different from those associated with default and higher mobility.

download in pdf format
   (276 K)

email paper

A non-technical summary of this paper is available in the October 2008 NBER digest.  You can sign up to receive the NBER Digest by email.

This paper is available as PDF (276 K) or via email.

Acknowledgments

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w14310

Published: Ferreira, Fernando & Gyourko, Joseph & Tracy, Joseph, 2010. "Housing busts and household mobility," Journal of Urban Economics, Elsevier, vol. 68(1), pages 34-45, July.

Users who downloaded this paper also downloaded these:
Ferreira, Gyourko, and Tracy w17405 Housing Busts and Household Mobility: An Update
Schulhofer-Wohl w16701 Negative Equity Does Not Reduce Homeowners' Mobility
Glaeser, Gyourko, and Saiz w14193 Housing Supply and Housing Bubbles
Glaeser, Gottlieb, and Gyourko w16230 Can Cheap Credit Explain the Housing Boom?
Gyourko w14708 Understanding Commercial Real Estate: Just How Different from Housing Is It?
 
Publications
Activities
Meetings
Data
People
About

Support
National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us