Negative home equity reduces household mobility: Evidence from administrative data

Citation data:

Journal of Housing Economics, ISSN: 1051-1377

Publication Year:
2018
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DOI:
10.1016/j.jhe.2018.06.010
Author(s):
Sander van Veldhuizen; Benedikt Vogt; Bart Voogt
Publisher(s):
Elsevier BV
Tags:
Economics, Econometrics and Finance
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article description
We investigate the impact of negative home equity on household residential mobility. We employ a unique administrative panel data set covering nearly the whole population of Dutch homeowners. The data contains a large set of personal characteristics of more than 2,000,000 homeowners. We identify the effect of negative home equity on mobility by exploiting the quasi-exogenous regional variation of the unanticipated housing market shock during 2008–2012, in which real house prices declined by 25%. Households plunging into negative home equity due to unanticipated declining house prices are 21% less likely to move compared to households upholding positive home equity.