TY  - JOUR
AU  - Ferreira,Fernando
AU  - Gyourko,Joseph
AU  - Tracy,Joseph
TI  - Housing Busts and Household Mobility
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 14310
PY  - 2008
Y2  - September 2008
UR  - http://www.nber.org/papers/w14310
L1  - http://www.nber.org/papers/w14310.pdf
N1  - Author contact info:
Fernando Ferreira
The Wharton School
University of Pennsylvania
1461 Steinberg - Dietrich Hall
3620 Locust Walk
Philadelphia, PA 19104-6302
Tel: 215/898-7181
Fax: 215/573-2220
E-Mail: fferreir@wharton.upenn.edu

Joseph Gyourko
University of Pennsylvania
Wharton School of Business
3620 Locust Walk
1480 Steinberg-Dietrich Hall
Philadelphia, PA 19104-6302
Tel: 215/898-3003
Fax: 215/573-2220
E-Mail: gyourko@wharton.upenn.edu

Joseph Tracy
Executive Vice President
Federal Reserve Bank of New York
33 Liberty Street
New York, NY 10045
Tel: 212/720-6344
E-Mail: joseph.tracy@ny.frb.org
AB  - 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.
ER  -