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The Impact of House Price Appreciation on Household Mobility

https://doi.org/10.1006/jhec.1994.1002Get rights and content

Abstract

Surveys have confirmed that people view housing units as both consumption and investment goods. This paper tests empirically how both prior and future appreciation affect households as they consider whether to change the housing portion of their investment portfolio by moving to another unit. Using American Housing Survey data and a nonparametric estimation technique, homeowners over the age of 40 with more than five years in their unit were more likely to move if their unit experienced higher-than-average future appreciation and if their unit had experienced higher-than-average appreciation in the past. The latter result indicates that repeat-sales indices may be upwardly biased; the former indicates that households may not correctly estimate future appreciation.

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