When Money Moves In: The Consequences of Housing Wealth

67 Pages Posted: 22 Nov 2022 Last revised: 18 Feb 2024

See all articles by Darren Aiello

Darren Aiello

Brigham Young University

Jason D. Kotter

Brigham Young University - Department of Finance

Gregor Schubert

UCLA Anderson School of Management

Date Written: November 18, 2022

Abstract

Using a novel dataset tracking millions of households across home purchases, we demonstrate that an increase in housing wealth benefits households by allowing them to move up the property ladder, but also causes these households to pay a premium for their new home. These decisions spill over to the broader housing market. In aggregate, the flow of housing equity gains into an area cause upward regional price pressure—a 10% increase in equity gain amongst incoming movers leads to 0.4 percentage point higher house price growth—with these higher prices disproportionately impacting first-time home buyers in the area.

Keywords: Household finance, financial constraints, migration, real estate

JEL Classification: G51, D83, R31, D10

Suggested Citation

Aiello, Darren and Kotter, Jason D. and Schubert, Gregor, When Money Moves In: The Consequences of Housing Wealth (November 18, 2022). Available at SSRN: https://ssrn.com/abstract=4280776 or http://dx.doi.org/10.2139/ssrn.4280776

Darren Aiello (Contact Author)

Brigham Young University ( email )

United States

HOME PAGE: http://darrenaiello.com

Jason D. Kotter

Brigham Young University - Department of Finance ( email )

United States

Gregor Schubert

UCLA Anderson School of Management ( email )

Los Angeles, CA 90095-1481
United States

HOME PAGE: http://https://www.anderson.ucla.edu/faculty-and-research/finance/faculty/gregor-schubert

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