Mobility and Exit from Homeownership: Implications for Community Reinvestment Lending

Publication Date

January 2008

Author(s)

Jonathan Spader, Roberto G. Quercia

Client/Funder

Ford Foundation

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Low-income and minority homeowners are less likely than their high-income and white counterparts to move, but no less likely to purchase a new home when a move is made.

This study focuses on the transition out of homeownership among community reinvestment loan borrowers, documenting the patterns of mobility and homeownership exit among low-income and minority households.

We show that the higher rates of homeownership exit documented among low-income and minority borrowers in the larger population of homeowners do not hold for community reinvestment mortgage borrowers. We model the transition out of homeownership, separating the determinants of mobility from the determinants of tenure choice.

Our results show that low-income and minority homeowners are less likely than their high-income and white counterparts to move, but no less likely to purchase a new home when a move is made.

These findings are contrasted with the results of a model that specifies the transitions out of homeownership as the purchase of a new home and the return to renting.