Esteban Calvo, Kelly Haverstick, and Natalia A. Zhivan Center for Retirement Research at Boston College 11 th Annual Joint Conference of the Retirement Research Consortium The National Press Club Washington, DC August 11, 2009 Determinants and Consequences of Moving Decisions for Older Homeowners

The lore on whether older homeowners move is mixed. 1 Sources: U.S. Census Bureau. 2000; and Authors’ calculations from the University of Michigan, Health and Retirement Study (HRS), Percent of the Population 65 and Older, 2000Average Home Equity by Age,

The HRS shows that an average of 7% of homeowners move each two-year period. 2 Note: The 1994 measure of migration is not consistent with other years because one variable used to define a move in the waves was not available in the 1994 wave. Source: Authors’ calculations from HRS. Percentage of Homeowners Moving, by Distance Moved,

Over the twelve-year period, 30% of homeowners move at least once. 3 Note: Households are weighted using the 2004 household weights. Source: Authors’ calculations from HRS. Percentage of Homeowners Ever Moving,

Movers relocate for a variety of reasons. 4 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 HRS. Distribution of Reasons for Migration,

Characteristics of movers by reason indicate two types – “planners” and “reactors.” 5 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 HRS. Characteristics of Movers by Reason Given for Moving, Characteristics PlannersReactors Better location/house FinancialRetirementFamilyHealth College graduates Married/partnered Good to excellent health status 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 Number of observations

So, we pursued the notion of splitting the sample into two groups. 6 Source: Authors’ illustration. Movers (reactors) Movers (planners) “Shock”“Non-shock” Non-movers

We define a shock as: 7 death of a spouse; divorce; entry into a nursing home; hospitalization or much worsened health; and/or loss of a job.

Considering the shock and non-shock groups separately, we explore three issues: 8 determinants affecting the probability of moving; financial consequences of moving; and psychological consequences of moving.

Demographics similarly affect the probability of moving for each group, with one exception. 9 Note: For age, the effect shown is for a change from the 25 th percentile to the 75 th percentile. All effects are statistically significant at the 10 percent level, except for females in the shock group. Source: Authors’ calculations from HRS. Effects of Demographic Factors on the Probability of Moving for Older Homeowners, by Shock Status,

Not surprisingly, those with a divorce or the death of a spouse are more likely to move. 10 Effects of the Type of Shock on the Probability of Moving for Older Homeowners with Shocks, Note: Effects are statistically significant at the 10 percent level. Source: Authors’ calculations from HRS.

Surprisingly, the impacts of other shocks are not significant. 11 Effects of the Type of Shock on the Probability of Moving for Older Homeowners with Shocks, Note: Effects are not statistically significant at a 10 percent level. Source: Authors’ calculations from HRS.

The non-shock movers are less likely to cite family and health reasons. 12 Reasons Provided for Moving by Older Homeowners, by Shock Status, Note: The categories within each group do not add to 100 percent due to movers that provided no reason. Source: Authors’ calculations from HRS.

Both types of movers experience large changes in home equity, but in opposite directions. 13 Source: Authors’ calculations from HRS. Average Change in Home Equity, by Shock and Move Status, , 2006 Dollars

LIMRA International The 2001 Individual Annuity Market: Sales and Assets. Windsor, CT. 14 Moving makes both the non-shock and shock homeowners feel better. Average Change in Psychological Well-Being, by Shock Status, by Move Status, Source: Authors’ calculations from HRS.

LIMRA International The 2001 Individual Annuity Market: Sales and Assets. Windsor, CT. 15 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, Source: Authors’ calculations from HRS. Statistically significant Not statistically significant

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 The 2001 Individual Annuity Market: Sales and Assets. Windsor, CT. 16 Conclusion