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Liquidity Constraints, Wealth Transfers and Home Ownership

Listed author(s):
  • Blickle, Kristian

    ()

  • Brown, Martin

    ()

We study the impact of liquidity constraints on home ownership by comparing the tenure and housing choice of households who receive intra-family wealth transfers to those that do not. Our analysis is based on household-level panel data providing annual information on household characteristics, wealth transfers, tenure status as well as changes in the size and quality of housing. Our treatment effect estimates suggest that wealth transfers increase the propensity of households to transition to ownership by 15 to 20 percentage points. By contrast, wealth transfers do not increase the likelihood that existing homeowners “trade-up” to larger homes in better locations.

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File URL: http://ux-tauri.unisg.ch/RePEc/usg/sfwpfi/WPF-1618.pdf
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Paper provided by University of St. Gallen, School of Finance in its series Working Papers on Finance with number 1618.

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Length: 66 pages
Date of creation: Sep 2016
Handle: RePEc:usg:sfwpfi:2016:18
Contact details of provider: Phone: +41 71 243 40 11
Fax: +41 71 243 40 40
Web page: http://www.unisg.ch/de/universitaet/schools/finance

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  1. Engelhardt, Gary V. & Mayer, Christopher J., 1998. "Intergenerational Transfers, Borrowing Constraints, and Saving Behavior: Evidence from the Housing Market," Journal of Urban Economics, Elsevier, vol. 44(1), pages 135-157, July.
  2. Duca, John V. & Muellbauer, John & Murphy, Anthony, 2010. "Housing markets and the financial crisis of 2007-2009: Lessons for the future," Journal of Financial Stability, Elsevier, vol. 6(4), pages 203-217, December.
  3. Chiuri, Maria Concetta & Jappelli, Tullio, 2003. "Financial market imperfections and home ownership: A comparative study," European Economic Review, Elsevier, vol. 47(5), pages 857-875, October.
  4. Duca, John V. & Rosenthal, Stuart S., 1994. "Borrowing constraints and access to owner-occupied housing," Regional Science and Urban Economics, Elsevier, vol. 24(3), pages 301-322, June.
  5. Andreas Fuster & Basit Zafar, 2016. "To Buy or Not to Buy: Consumer Constraints in the Housing Market," American Economic Review, American Economic Association, vol. 106(5), pages 636-640, May.
  6. Brown, Martin & Guin, Benjamin, 2015. "The Exposure of Mortgage Borrowers to Interest Rate Risk, Income Risk and House Price Risk – Evidence from Swiss Loan Application Data," Working Papers on Finance 1509, University of St. Gallen, School of Finance.
  7. Peter Linneman & Susan Wachter, 1989. "The Impacts of Borrowing Constraints on Homeownership," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 17(4), pages 389-402.
  8. Martin Brown & Benjamin Suman Guin, 2015. "The Exposure of Mortgage Borrowers to Interest Rate Risk and House Price Risk – Evidence from Swiss Loan Application Data," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 151(II), pages 3-37, June.
  9. Santiago Fernandez de Lis & Saifeddine Chaibi & Jose Felix Izquierdo & Felix Lores & Ana Rubio & Jaime Zurita, 2013. "Some international trends in the regulation of mortgage markets: Implications for Spain," Working Papers 1317, BBVA Bank, Economic Research Department.
  10. Linneman, Peter & Megbolugbe, Isaac F. & Wachter, Susan M. & Cho, Man, 1997. "Do Borrowing Constraints Change U.S. Homeownership Rates?," Journal of Housing Economics, Elsevier, vol. 6(4), pages 318-333, December.
  11. John Y. Campbell & Stefano Giglio & Parag Pathak, 2011. "Forced Sales and House Prices," American Economic Review, American Economic Association, vol. 101(5), pages 2108-2131, August.
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