Negative Equity Does Not Reduce Homeowners' Mobility

21 Pages Posted: 19 Jan 2011

Date Written: January 2011

Abstract

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.

Suggested Citation

Schulhofer-Wohl, Sam, Negative Equity Does Not Reduce Homeowners' Mobility (January 2011). NBER Working Paper No. w16701. Available at SSRN: https://ssrn.com/abstract=1743320

Sam Schulhofer-Wohl (Contact Author)

Federal Reserve Bank of Chicago ( email )

230 South LaSalle Street
Chicago, IL 60604
United States

HOME PAGE: http://sschulh1.wordpress.com

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