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Why has home ownership fallen among the young?

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Author Info
Jonas D. M. Fisher
Martin Gervais

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Abstract

We document that home ownership of households with "heads" aged 25 - 44 years fell substantially between 1980 and 2000 and recovered only partially during the 2001-2005 housing boom. The 1980-2000 decline in young home ownership occurred as improvements in mortgage opportunities made it easier to purchase a home. This paper uses an equilibrium life-cycle model calibrated to micro and macro evidence to understand why young home ownership fell over a period when it became easier to own a home. Our findings indicate that a trend toward marrying later and the increase in household earnings risk that occurred after 1980 account for 3/5 to 4/5 of the decline in young home ownership.

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Paper provided by Federal Reserve Bank of Chicago in its series Working Paper Series with number WP-09-01.

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Date of creation: 2009
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Handle: RePEc:fip:fedhwp:wp-09-01

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Keywords: Home ownership ; Marriage;

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