Why Has Home Ownership Fallen among the Young?

49 Pages Posted: 21 Mar 2009

See all articles by Jonas D. M. Fisher

Jonas D. M. Fisher

Federal Reserve Bank of Chicago - Economic Research Department

Martin Gervais

University of Iowa; IFS

Multiple version iconThere are 2 versions of this paper

Date Written: March 6, 2009

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.

Keywords: Housing, home ownership, tenure choice, first-time home-buyers

JEL Classification: E0, J1, R21

Suggested Citation

Fisher, Jonas D. M. and Gervais, Martin, Why Has Home Ownership Fallen among the Young? (March 6, 2009). FRB of Chicago Working Paper No. 2009-01. Available at SSRN: https://ssrn.com/abstract=1365939 or http://dx.doi.org/10.2139/ssrn.1365939

Jonas D. M. Fisher (Contact Author)

Federal Reserve Bank of Chicago - Economic Research Department ( email )

230 South LaSalle Street
Chicago, IL 60604-1413
United States

Martin Gervais

University of Iowa ( email )

108 Pappajohn Building
Iowa City, IA 52242
United States

IFS ( email )

7 Ridgmount Street
London, WC1E 7AE
United Kingdom

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