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Mortgage subsidies, homeownership, and marriage: Effects of the VA loan program

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  • Ricks, Judith S.

Abstract

This paper analyzes the effect of mortgage subsidies on homeownership and marriage. The empirical design exploits both access to the Veteran’s Administration Loan Guaranty Program and geographic variation in house prices. The results show that veterans living in one standard deviation higher house price areas had 22.7 percent higher homeownership and 8.7 percent higher marriage. These differences cannot be explained by differences in income or educational attainment. The evidence supports that reductions in the down payment constraint mattered more than the relative cost homeownership. This suggests that mortgage subsidies affect housing demand through both the homeownership and household formation channels.

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  • Ricks, Judith S., 2021. "Mortgage subsidies, homeownership, and marriage: Effects of the VA loan program," Regional Science and Urban Economics, Elsevier, vol. 87(C).
    • Handle: RePEc:eee:regeco:v:87:y:2021:i:c:s0166046221000107
    DOI: 10.1016/j.regsciurbeco.2021.103650
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    Cited by:

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    2. Muhammad Adil Rauf & Olaf Weber, 2022. "Housing Sustainability: The Effects of Speculation and Property Taxes on House Prices within and beyond the Jurisdiction," Sustainability, MDPI, vol. 14(12), pages 1-19, June.
    3. Margarida Madaleno, 2024. "Access to housing credit and marriage: evidence from redlining maps," Review of Economics of the Household, Springer, vol. 22(4), pages 1397-1422, December.

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    More about this item

    Keywords

    Housing policy; Mortgage subsidies; Household formation; Marriage;
    All these keywords.

    JEL classification:

    • R20 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - General
    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand
    • R28 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Government Policy

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