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Why Has Home Ownership Fallen Among the Young?

30 Pages Posted: 30 Aug 2011  

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: August 2011

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 2001–5 housing boom. The 1980–2000 decline in young home ownership occurred as improvements in mortgage opportunities seemingly made it easier to purchase a home. This article uses an equilibrium life‐cycle model calibrated to micro and macro evidence to understand these developments. A trend toward marrying later mechanically lowers young home ownership after 1980. We show that the large rise in earnings risk that occurred after 1980 can easily account for the remaining decline in young home ownership.

Suggested Citation

Fisher, Jonas D. M. and Gervais, Martin, Why Has Home Ownership Fallen Among the Young? (August 2011). International Economic Review, Vol. 52, Issue 3, pp. 883-912, 2011. Available at SSRN: https://ssrn.com/abstract=1919427 or http://dx.doi.org/10.1111/j.1468-2354.2011.00653.x

Jonas D. M. Fisher

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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