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Expected Home Ownership and Real Wealth Accumulation of Youth


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  • Donald R. Haurin
  • Patric H. Hendershott
  • Susan M. Wachter


This paper describes the real wealth accumulation of American youth and relates this behavior to variations in real constant-quality house prices in their localities of residence. We argue that increases in the real constant-quality house price have two offsetting effects on wealth. First, the greater the local constant-quality price of housing, the greater the wealth needed to meet the lender imposed down payment constraint if housing demand is price inelastic. However, increased real constant-quality house price reduces the likelihood of home ownership and thus the desire the accumulate wealth needed for a down payment. Using a panel data set for youth age 20-33 for the years 1985 through 1990 we find that the combined direct and indirect impact of variations in real constant-quality house price on wealth is modest for changes near the average real house price, but youths' wealth declines substantially in areas with high real house price.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 5629.

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Date of creation: Jun 1996
Date of revision:
Handle: RePEc:nbr:nberwo:5629

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  1. Peter M. Zorn, 1989. "Mobility-Tenure Decisions and Financial Credit: Do Mortgage Qualification Requirements Constrain Homeownership?," Real Estate Economics, American Real Estate and Urban Economics Association, American Real Estate and Urban Economics Association, vol. 17(1), pages 1-16.
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Cited by:
  1. Clara Mulder & William A.V. Clark & Michael Wagner, 2002. "A comparative analysis of leaving home in the United States, the Netherlands and West Germany," Demographic Research, Max Planck Institute for Demographic Research, Rostock, Germany, vol. 7(17), pages 565-592, December.
  2. Hochgürtel, S. & Soest, A.H.O. van, 1996. "The Relation Between Financial and Housing Wealth of Dutch Households," Discussion Paper, Tilburg University, Center for Economic Research 1996-82, Tilburg University, Center for Economic Research.
  3. Berlemann, Michael & Freese, Julia, 2010. "Monetary policy and real estate prices: A disaggregated analysis for Switzerland," HWWI Research Papers 2-19, Hamburg Institute of International Economics (HWWI).
  4. Carter, Steven, 2011. "Housing tenure choice and the dual income household," Journal of Housing Economics, Elsevier, Elsevier, vol. 20(3), pages 159-170, September.
  5. Juan Mora-Sanguinetti, 2012. "Is judicial inefficacy increasing the weight of the house property market in Spain? Evidence at the local level," SERIEs, Spanish Economic Association, Spanish Economic Association, vol. 3(3), pages 339-365, September.
  6. Andrew, Mark & Haurin, Donald & Munasib, Abdul, 2006. "Explaining the route to owner-occupation: A transatlantic comparison," Journal of Housing Economics, Elsevier, Elsevier, vol. 15(3), pages 189-216, September.


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