Ownership, Rental Costs, and the Prospects of Building Home Equity: An Analysis of 100 Metropolitan Areas
AbstractThis report compares the ownership and rental costs in 100 major U.S. metropolitan areas. Extending the work from a previous CEPR/NLIHC paper, "The Cost of Maintaining Ownership in the Current Crisis: Comparisons in 20 Cities," this study, while demonstrating the wide diversity in housing markets across the nation, finds that in many areas, homeownership costs are in line with rental costs. In these areas, it is practical and desirable to focus on policies that keep homeowners in their homes. The report goes on to show that in bubble-inflated markets, however, homeownership is not only a costly and risky proposition, but continuing price declines mean that homeowners will not accrue any equity. The authors suggest that policy makers should be sure to consider affordable rental options as part of the solution when drafting proposals to help households in these markets.
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Bibliographic InfoPaper provided by Center for Economic and Policy Research (CEPR) in its series CEPR Reports and Issue Briefs with number 2008-14.
Length: 17 pages
Date of creation: May 2008
Date of revision:
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housing bubble; homeownership; housing policy;
Find related papers by JEL classification:
- G - Financial Economics
- G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
- G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
- R - Urban, Rural, Regional, Real Estate, and Transportation Economics
- R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand
- L85 - Industrial Organization - - Industry Studies: Services - - - Real Estate Services
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-11-18 (All new papers)
- NEP-GEO-2008-11-18 (Economic Geography)
- NEP-URE-2008-11-18 (Urban & Real Estate Economics)
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