Negative equity has large impact on household mobility: NY Fed paper

Homeowners with negative equity are about one-third less likely to move house than equivalent owners, according to a New York Federal Reserve paper published on Thursday.

Fernando Ferreira, Joseph Gyourko and Joseph Tracy, the paper's authors, use data from the American Housing Survey to estimate the impact of three financial frictions – negative equity, mortgage lock-in and property tax lock-in on household mobility in the US.

The authors find that negative equity reduces household mobility by