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Does Homeownership Matter? The Long-Term Consequences of Losing a House during the Great Recession

Author

Listed:
  • Heidi Artigue
  • Patrick Bayer
  • Fernando V. Ferreira
  • Stephen Ross

Abstract

We examine the long-term impact of owning versus renting a home in the United States. Our research design compares two groups of homeowners who experienced similar negative income shocks during the Great Recession but had different probabilities of retaining their homes due to mortgage modifications. While the two groups exhibit nearly identical pre-trends, they diverge by 36 percentage points in home retention. More than half of this disparity persists nearly a decade later, translating into average housing capital gains of $83,000. However, homeownership and housing wealth did not affect creditworthiness, consumption, or neighborhood quality, partly due to tightening credit constraints.

Suggested Citation

  • Heidi Artigue & Patrick Bayer & Fernando V. Ferreira & Stephen Ross, 2025. "Does Homeownership Matter? The Long-Term Consequences of Losing a House during the Great Recession," NBER Working Papers 33692, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:33692
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    More about this item

    JEL classification:

    • G51 - Financial Economics - - Household Finance - - - Household Savings, Borrowing, Debt, and Wealth
    • 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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