Negative equity traps some homeowners

October 15, 2008 06:12PM

A new study by housing experts from the University of Pennsylvania Wharton School of Business and
Federal Reserve Bank of New York says some homeowners with negative equity are often
“locked in” to their existing home and are 50 percent less likely to
move in order to take a new job, cut their commute or move to a neighborhood with better schools. The study, “Housing
Busts and Household Mobility,” found that negative equity causes homeowners to stay in their homes because sales won’t
pay off the existing mortgage until housing prices rebound.

Comments are closed.