Wealth Accumulation and Housing Choices of Young Households: An Exploratory Investigation

J. OF HOUSING RESEARCH

Posted: 13 Sep 1996

See all articles by Donald R. Haurin

Donald R. Haurin

Ohio State University (OSU) - Economics

Patric H. Hendershott

University of Aberdeen - Centre for Property Research; National Bureau of Economic Research (NBER)

Susan M. Wachter

University of Pennsylvania - Wharton School, Department of Real Estate ; University of Pennsylvania - Finance Department

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Abstract

This article describes the wealth accumulation of American youth and relates it to their eventual housing choices. A data set is compiled for youth ages 20 to 33 for the years 1985 through 1990. We construct wealth profiles for each household and compare these profiles across different patterns of labor supply, marriage, fertility, gender, education, race/ethnicity, and tenure choice. We find that renters' wealth accumulates rapidly in the year before and year of first homeownership. The factors related to this increase are marriage, increased labor supply by married women, and gifts and inheritance. Of particular interest is the finding of an inverse U-shaped relationship between the local price of housing and middle- and upper-income renters' wealth. However, there is no relationship between these variables for low-income renters. One difference between these groups is that low-income renters have no tax advantage once they become homeowners.

JEL Classification: D3

Suggested Citation

Haurin, Donald R. and Hendershott, Patric H. and Wachter, Susan M., Wealth Accumulation and Housing Choices of Young Households: An Exploratory Investigation. J. OF HOUSING RESEARCH. Available at SSRN: https://ssrn.com/abstract=9143

Donald R. Haurin (Contact Author)

Ohio State University (OSU) - Economics ( email )

154 N. Oval Mall
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Columbus, OH 43210-1172
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614-292-0482 (Phone)
614-292-9530 (Fax)

Patric H. Hendershott

University of Aberdeen - Centre for Property Research ( email )

Aberdeen AB24 2UF
Scotland

National Bureau of Economic Research (NBER) ( email )

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Cambridge, MA 02138
United States

Susan M. Wachter

University of Pennsylvania - Wharton School, Department of Real Estate ( email )

The Wharton School
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Philadelphia, PA 19104-6330
United States
215-898-6355 (Phone)

HOME PAGE: http://real.wharton.upenn.edu/~wachter/index.html

University of Pennsylvania - Finance Department ( email )

The Wharton School
3620 Locust Walk
Philadelphia, PA 19104
United States

HOME PAGE: http://real.wharton.upenn.edu/~wachter/index.html

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