ABSTRACT Political identity and partisanship are salient features of today's society. Using deeds records and voter rolls, we show that current residents are more likely to sell their homes when opposite‐party neighbors move in nearby than when unaffiliated or same‐party neighbors do. This is especially true when the new neighbors are politically active, consistent with an animosity between parties mechanism. We conclude that affective polarization is not limited to purely political settings and affects one of the household's most important financial decisions, their home transactions.

We study neighborhood choice using a novel research design that contrasts the move rate of homeowners who receive a new different-race neighbor immediately next-door versus slightly farther away on the same block. This approach isolates a component of preferences directly attributable to neighbors’ identities. Both Black and White homeowners are more likely to move after receiving a new different-race neighbor. Findings are robust to additional controls (e.g., income) and alternative research designs. We find evidence of heterogeneity in responses, especially associated with housing density, which has implications for understanding contemporary neighborhood racial change and prospects for maintaining stable, integrated neighborhoods. (JEL D91, J15, R23, R31)