Household saving behaviors among newlyweds based on housing types

Abstract

Housing prices, which have continued to rise globally, become great financial burdens for newlyweds and affect the saving behaviors of young adults. This study examines whether housing characteristics, especially residential housing contract types, affect newlyweds’ saving behavior in the early stages of their marriage. We focus on newlyweds who form households through their first marriage and analyze the last twenty-year-long informative datasets. Our empirical results show that the area of residence, number of children, household income, and financial statuses, such as assets and liabilities, affect newlyweds’ saving patterns. Homeownership has a positive effect on household savings considering the debt-to-income ratio. People living in expensive houses have the potential to save large amounts. However, savings differ by housing contract type, even among households living in houses of similar value. Our analyses contribute to the explanation of a special lease (i.e., Jeonse) contract and provide relevant policy implications in that the housing contract types of young adults affect not only their residential stability but also their future asset accumulation.

Keywords: Housing, Jeonse, Newlyweds, Personal savings, Regional housing market, Family