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Why has home ownership fallen among the young?

  • Gervais, Martin
  • Fisher, Jonas

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 Keywords; housing, home ownership, tenure choice, first-time home-buyers, marriage, income risk

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File URL: http://eprints.soton.ac.uk/71045/1/0907.pdf
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Paper provided by Economics Division, School of Social Sciences, University of Southampton in its series Discussion Paper Series In Economics And Econometrics with number 0907.

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Date of creation: 01 Jan 2009
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Handle: RePEc:stn:sotoec:0907
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