Do Homeowners Have Longer Commutes?

Existing literature suggests that homeowners are relatively less mobile across geographic locations and experience longer periods of unemployment compared to renters. This paper investigates the relationship between homeownership and commuting time to work. We first develop a theoretical model to demonstrate that higher housing prices lead to extended commutes to work for homeowners due to “drive-’til-you-qualify for mortgages”. Utilizing data from the Panel Study of Income Dynamics (PSID), we provide evidence indicating that homeowners, on average, spend 6.9 percent more time commuting compared to renters, after controlling for observables. Our results remain robust after considering endogeneity issues, unobservable household characteristics, and functional misspecifications. In addition, we also find that the effect is more pronounced among households residing in metropolitan areas, minority households, and those with lower income and wealth. Subsidizing homeownership in the U.S. is often justified by its presumed economic and social benefits. However, this paper sheds light on a potential negative externality of homeownership: longer commutes to work.