Housing Lock: Dutch Evidence on the Impact of Negative Home Equity on Household Mobility
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Abstract
This paper employs Dutch administrative population data to test the "housing lock hypothesis": the conjecture that homeowners with negative home equity, low levels of financial assets, and restricted opportunities to borrow reduce their mobility. Variation in home equity driven by the timing of home purchase within a municipality and the harshness of Dutch recourse laws facilitates identification of housing lock effects. The 2SLS estimate for the effect of negative home equity is a 74–79 percent decline in mobility, where effects are substantially larger for households with low financial asset holdings or moves over longer distances.Citation
Bernstein, Asaf, and Daan Struyven. 2022. "Housing Lock: Dutch Evidence on the Impact of Negative Home Equity on Household Mobility." American Economic Journal: Economic Policy, 14 (3): 1-32. DOI: 10.1257/pol.20150252Additional Materials
JEL Classification
- G51 Household Finance: Household Saving, Borrowing, Debt, and Wealth
- R21 Urban, Rural, Regional, Real Estate, and Transportation Economics: Housing Demand
- R23 Urban, Rural, Regional, Real Estate, and Transportation Economics: Regional Migration; Regional Labor Markets; Population; Neighborhood Characteristics
- R31 Housing Supply and Markets
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