Housing careers and the Great Recession

Abstract

This paper studies the housing careers of renters and homeowners before, during and after the Great Recession by using the concept of the housing ladder. Based on Dutch administrative data, we find that renters and homeowners were less likely to climb the housing ladder during the Great Recession than before and that these upward movement rates recovered to pre-recession levels afterwards. The negative recession effect was driven by a decreased probability of moving to privately owned housing. The decrease in the probability of house buying may be explained by low consumer confidence, housing price uncertainty and a limited supply of housing due to loss aversion.