The Effects of the Real Estate Bust on Renter Perceptions of Homeownership

39 Pages Posted: 14 Mar 2010

See all articles by J. Michael Collins

J. Michael Collins

University of Wisconsin - Madison

Laura Choi

Federal Reserve Bank of San Francisco

Date Written: March 11, 2010


After almost a decade of strong price appreciation, the housing market fell into a steep decline in 2007. By 2008, foreclosure filings on owner-occupied homes were surpassing record levels. Due to the housing downturn, fewer renters may aspire to own a home, which could have lasting implications for neighborhoods and household asset building. This study analyzes the impact of the housing downturn on renters’ intent to purchase a home, their perceptions of the risks and benefits of homeownership, and their interest in information and advice concerning homeownership.

Based on a survey of 400 low- and moderate-income renters in the San Francisco Bay Area, most renters continue to aspire to homeownership, especially renters who are younger, who have higher incomes, and who speak English at home. In addition, lower-income and minority renters, as well as renters who reside in zip codes with greater exposure to foreclosures, have more negative perceptions of homeownership. Together, these findings indicate the housing downturn produced shifts in renters’ aspirations to own a home and the expected risks and benefits of owning a home that vary by residential location and demographic characteristics.

Keywords: homeownership, housing downturn, renters

JEL Classification: D10, D12, D80, D84

Suggested Citation

Collins, J. Michael and Choi, Laura, The Effects of the Real Estate Bust on Renter Perceptions of Homeownership (March 11, 2010). Available at SSRN: or

J. Michael Collins (Contact Author)

University of Wisconsin - Madison ( email )

United States
6086160369 (Phone)

Laura Choi

Federal Reserve Bank of San Francisco ( email )

101 Market Street
San Francisco, CA 94105
United States


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