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The Postwar Conquest of the Home Ownership Dream

Author

Listed:
  • Matthew Chambers

    () (Department of Economics, Towson University)

  • Carlos Garriga

    (Federal Reserve Bank of St. Louis)

  • Don E. Schlagenhauf

    (Federal Reserve Bank of St. Louis)

Abstract

The post-WorldWar II witnessed the largest housing boom in recent history. The objective of this paper is to develop a quantitative equilibrium model of tenure choice to analyze the key determinants in the co-movement between home ownership and house prices over the period 1940 to 1960. The parameterized model is consistent with key aggregate and distributional features observed in the 1940 U.S. economy and is capable of accounting for the observed postwar housing boom. The paper shows, both theoretically and quantitatively, that the key to explaining the co- movement is an asymmetric productivity change that favors the goods sector relative to the construction sector. Other factors such as demographics, income risk, and government policy are important determinants of the home ownership rate but have relatively small e¤ects on housing prices.

Suggested Citation

  • Matthew Chambers & Carlos Garriga & Don E. Schlagenhauf, 2016. "The Postwar Conquest of the Home Ownership Dream," Working Papers 2016-07, Towson University, Department of Economics, revised Apr 2016.
  • Handle: RePEc:tow:wpaper:2016-07
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    References listed on IDEAS

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    Cited by:

    1. Paz-Pardo, Gonzalo, 2021. "Homeownership and portfolio choice over the generations," Working Paper Series 2522, European Central Bank.
    2. Carlos Garriga & Aaron Hedlund, 2019. "Crises in the Housing Market: Causes, Consequences, and Policy Lessons," Working Papers 2019-33, Federal Reserve Bank of St. Louis.

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    More about this item

    Keywords

    Housing Finance; first-time buyers; life-cycle.;
    All these keywords.

    JEL classification:

    • E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment
    • E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook

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