Determinants and Consequences of Moving
Decisions for Older Homeowners
Esteban Calvo, Kelly Haverstick, and Natalia A. Zhivan
Center for Retirement Research at Boston College
11th Annual Joint Conference of the Retirement Research Consortium
The National Press Club
Washington, DC
August 11, 2009
The lore on whether older homeowners move
is mixed.
Percent of the Population 65 and Older, 2000
16 0
18%
15%
12%
10%
5%
Thousands of 2006 dollars
20%
Average Home Equity by Age, 1992-2004
120
80
40
0
0%
Florida
United States
50
54
58
62
66
70
74
Sources: U.S. Census Bureau. 2000; and Authors’ calculations from the University of Michigan, Health and Retirement Study (HRS),
1992-2004.
1
The HRS shows that an average of 7% of
homeowners move each two-year period.
Percentage of Homeowners Moving, by Distance Moved, 1992-2004
10%
8%
6%
4%
2%
0%
19 9 4
19 9 6
19 9 8
200+ m iles
2000
20-200 m iles
2002
2004
1-20 m iles
Note: The 1994 measure of migration is not consistent with other years because one variable used to define a move in the 1996-2004
waves was not available in the 1994 wave.
Source: Authors’ calculations from 1992-2004 HRS.
2
Over the twelve-year period, 30% of
homeowners move at least once.
Percentage of Homeowners Ever Moving, 1992-2004
Movers
Non-m overs
30%
70%
Note: Households are weighted using the 2004 household weights.
Source: Authors’ calculations from 1992-2004 HRS.
3
Movers relocate for a variety of reasons.
Distribution of Reasons for Migration, 1994-2004
Fam ily
28.1%
Financial
21.7%
Better Location/
H ouse
21.1%
15.5%
Retirem ent
H ealth
3.9 %
Other
3.3%
0%
5%
10%
15%
20%
25%
30%
Note: Households are classified according to the first reason they mention. Numbers do not add to 100 percent because non-respondents
are not included.
Source: Authors’ calculations from the 1994-2004 HRS.
4
Characteristics of movers by reason indicate
two types – “planners” and “reactors.”
Characteristics of Movers by Reason Given for Moving, 1994-2004
Planners
Characteristics
Reactors
Better
location/house
Financial
Retirement
Family
Health
College graduates
0.30
0.22
0.39
0.18
0.21
Married/partnered
0.70
0.63
0.80
0.56
0.60
Good to excellent health status
0.83
0.78
0.87
0.76
0.59
Value of primary residence, past wave (median)
$122,429
$157,465
$154,187
$110,860
$90,159
Non-housing financial wealth, past wave (median)
$24,109
$12,849
$47,066
$8,980
$1,756
392
378
261
515
75
Number of observations
Note: The number of observations does not add to the total number of movers since not all reasons for moving are listed in this table.
Households are not weighted since they may be included more than once.
Source: Author’ calculations from 1994-2004 HRS.
5
So, we pursued the notion of splitting the
sample into two groups.
Movers
(reactors)
Non-movers
“Shock”
Movers
(planners)
Non-movers
“Non-shock”
Source: Authors’ illustration.
6
We define a shock as:
• death of a spouse;
• divorce;
• entry into a nursing home;
• hospitalization or much worsened health; and/or
• loss of a job.
7
Considering the shock and non-shock groups
separately, we explore three issues:
• determinants affecting the probability of moving;
• financial consequences of moving; and
• psychological consequences of moving.
8
Demographics similarly affect the probability
of moving for each group, with one exception.
Effects of Demographic Factors on the Probability of Moving for Older Homeowners, by
Shock Status, 1994-2004
-1.7%
-2.1%
Age
Shock
Non-shock
-1.0 %
-1.6 %
Fem ale
5.4%
Not m arried
2.4%
2.5%
2.8%
1.6 %
1.1%
White
College degree
-4%
-2%
0%
2%
4%
6%
Note: For age, the effect shown is for a change from the 25th percentile to the 75th percentile. All effects are statistically significant at the
10 percent level, except for females in the shock group.
Source: Authors’ calculations from 1994-2004 HRS.
9
Not surprisingly, those with a divorce or the
death of a spouse are more likely to move.
Effects of the Type of Shock on the Probability of Moving for
Older Homeowners with Shocks, 1994-2004
50%
42%
40%
30%
20%
10%
9%
0%
Newly widowed
Newly divorced
Note: Effects are statistically significant at the 10 percent level.
Source: Authors’ calculations from 1994-2004 HRS.
10
Surprisingly, the impacts of other shocks are
not significant.
Effects of the Type of Shock on the Probability of Moving for
Older Homeowners with Shocks, 1994-2004
1%
0.5%
0.2%
0%
-1%
-1.1%
-2%
Job loss
Health shock
Nursing home
Note: Effects are not statistically significant at a 10 percent level.
Source: Authors’ calculations from 1994-2004 HRS.
11
The non-shock movers are less likely to cite
family and health reasons.
Reasons Provided for Moving by Older Homeowners, by Shock Status, 1994-2004
40 %
Shock
30 %
Non-shock
31%
26 %
26 %
22% 21%
20 %
15%
15%
16 %
10 %
6%
2%
0%
Better
location/ house
Financial
Retirem ent
Fam ily
H ealth
Note: The categories within each group do not add to 100 percent due to movers that provided no reason.
Source: Authors’ calculations from 1994-2004 HRS.
12
Both types of movers experience large changes
in home equity, but in opposite directions.
Average Change in Home Equity, by Shock and Move Status, 1994-2004, 2006 Dollars
$40,000
Mover
Non-m over
$20,000
$12,111
$32,771
$12,182
$0
-$20,000
-$25,704
-$40,000
Shock
Non-shock
Source: Authors’ calculations from 1994-2004 HRS.
13
Moving makes both the non-shock and shock
homeowners feel better.
Average Change in Psychological Well-Being, by Shock Status,
by Move Status, 1994-2004
0.15
Movers
Non-m overs
0.10
0.10
0.05
0.01
0.00
-0.05
-0.04
-0.10
-0.15
-0.12
Shock
Non-shock
Source: Authors’ calculations from 1994-2004 HRS.
LIMRA International. 2002. The 2001 Individual Annuity Market: Sales and Assets. Windsor, CT.
14
But for the shock households, it’s the shock –
not the move – that has the biggest impact.
Effects on the Change in Psychological Well-Being, 1994-2004
Move
0.1
Newly widowed
-1.5
Nursing hom e
-1.2
Newly divorced
-0.4
H ealth
-0.1
Statistically significant
Job loss
Not statistically significant
-2
-1.5
-1
0.0
-0.5
0
0.5
Source: Authors’ calculations from 1994-2004 HRS.
LIMRA International. 2002. The 2001 Individual Annuity Market: Sales and Assets. Windsor, CT.
15
Conclusion
• Older homeowners do move, but most moves are not to Florida.
• Moves fall into two categories: those that are planned and those that are reactive.
• Divorce and widowhood are major motivations for moving.
• Shock and non-shock movers experience large changes in home equity – one
negative and one positive.
• Moving makes all homeowners feel better but, for shock homeowners, shocks have
the largest impact on well-being.
LIMRA International. 2002. The 2001 Individual Annuity Market: Sales and Assets. Windsor, CT.
16