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Accounting for the Decline in Homeownership among the Young

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  • Yuxi Yao

    (University of Western Ontario)

Abstract

This paper documents that the drop in young homeownership is more persistent among non-college graduates compared to college graduates: while some college graduates postpone home purchasing, non-college graduates are more likely to remain longterm renters. I develop a model showing that the combination of a higher share of college graduates and a widening education-driven income gap accounts for the delayed home purchasing of college graduates and the lack of purchasing among non-college graduates. Exploiting cross-city variation, I find that the mechanism can quantitatively account for the diverging ownership decisions between the two education groups from 1980 to 2019.

Suggested Citation

  • Yuxi Yao, 2021. "Accounting for the Decline in Homeownership among the Young," GRU Working Paper Series GRU_2021_010, City University of Hong Kong, Department of Economics and Finance, Global Research Unit.
    • Handle: RePEc:cth:wpaper:gru_2021_010
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    References listed on IDEAS

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    3. Charles Ka Yui Leung & (single author only), 2021. "Handbook of Real Estate and Macroeconomics: An Introduction," ISER Discussion Paper 1137, Institute of Social and Economic Research, Osaka University.

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    More about this item

    Keywords

    Housing Tenure Choice; College Share; Household Income; Housing Prices; General Equilibrium Effects;
    All these keywords.

    JEL classification:

    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • E60 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General
    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand

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