Mobility and Mortgages: Evidence from the PSID

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 equity, particularly as equity becomes negative. We find that while owners do move less than renters, the move probability increases as homeowners become under- water. 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.

Publication
Regional Science and Urban Economics, 43(1): 1-7
Date