Spatial lock-in: Do falling house prices constrain residential mobility?

Falling house prices have caused numerous homeowners to suffer capital loss es. Those with little home equity may be prevented from moving because of i mperfections in housing finance markets: the proceeds from the sale of thei r home may be insufficient to repay their mortgage and provide a down payme nt on a new home. A data set of mortgages is used to examine the magnitude of these constraints. Estimates show that average mobility would have been 24% higher after 3 years had house prices not declined, and after 4 years, it would have been 33% higher. Among those with high initial loan-to-value ratios, the differences are even greater. (C) tool Academic Press.