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Why has home ownership fallen among the young?

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  • Jonas D. M. Fisher
  • Martin Gervais

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.

Suggested Citation

  • Jonas D. M. Fisher & Martin Gervais, 2009. "Why has home ownership fallen among the young?," Working Paper Series WP-09-01, Federal Reserve Bank of Chicago.
  • Handle: RePEc:fip:fedhwp:wp-09-01
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    More about this item

    Keywords

    Home ownership; Marriage;

    JEL classification:

    • E0 - Macroeconomics and Monetary Economics - - General
    • E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment
    • J1 - Labor and Demographic Economics - - Demographic Economics
    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand

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