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Home Ownership, Savings, and Mobility Over The Life Cycle

  • Jonathan Halket

    ()

  • Santhanagopalan Vasudev

In a Bewley model with endogenous price volatility, home ownership and mobility across locations and jobs, we assess the contribution of financial constraints, housing illiquidities and house price risk to home ownership over the life cycle. The model can explain the rise in home ownership and fall in mobility over the life cycle. While some households rent due to borrowing constraints in the mortgage market, factors that effect propensities to save and move, such as risky house values and transactions costs, are more important determinants of the ownership rate.

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File URL: http://www.essex.ac.uk/economics/discussion-papers/papers-text/dp712.pdf
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Paper provided by University of Essex, Department of Economics in its series Economics Discussion Papers with number 712.

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Date of creation: 01 Mar 2012
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Handle: RePEc:esx:essedp:712
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