Impediments to Post-Great Recession Recovery of Homeowner Mobility

We introduce a novel data set of Fannie Mae proprietary loan and market transaction observations to document the current experience and historical context of homeowner mobility. We find that homeowner mobility, measured as a move within five years of purchase loan origination, declined during the housing crisis and while it has recovered recently, it has not reached its pre-crisis level, still approximately 30 percent below its Pre-Crisis value. Furthermore, we find underwater homeowners who experienced rapid home price depreciation during the first five years of their home ownership to be least mobile across all periods. Post-crisis we observe a significant decline in the homeowner mobility of high equity homeowners relative to low equity borrowers. Other impediments to recent mobility include borrowers aging in place (older borrowers have increased in share and moved less frequently) and increases in the level and sensitivity of homeowner moves to a household’s debt relative to income. Based on our empirical model, we estimate that 25 percent of the observed decline in mobility rates can be explained by changes in recent buyer profile, while the remaining drop in mobility appears to reflect a change in homeowner preference for moving.

Impediments to Post-Great Recession Recovery of Homeowner Mobility (PDF)