HOMEOWNERSHIP AND HOUSING TRANSITIONS: EXPLAINING THE DEMOGRAPHIC COMPOSITION

Eunseong Ma; Sarah Zubairy

doi:10.1111/iere.12493

HOMEOWNERSHIP AND HOUSING TRANSITIONS: EXPLAINING THE DEMOGRAPHIC COMPOSITION

Eunseong Ma, Sarah Zubairy

Department of Economics

Research output: Contribution to journal › Article › peer-review

6 Citations (Scopus)

Abstract

We document the evolution of homeownership rate across various age groups for the period 1995–2015. We find that variations in the homeownership rates are relatively large for the young, which is mostly driven by renter-to-owner transitions. In order to explain these empirical facts, we consider a life-cycle model featuring housing tenure decisions. Housing is modeled as an indivisible and lumpy investment subject to both loan-to-value (LTV) and debt-to-income (DTI) credit constraints and transaction fees. Our analysis suggests that variations in the DTI limit play a crucial role in accounting for the uneven behavior across age groups.

Original language	English
Pages (from-to)	599-638
Number of pages	40
Journal	International Economic Review
Volume	62
Issue number	2
DOIs	https://doi.org/10.1111/iere.12493
Publication status	Published - 2021 May

Bibliographical note

Publisher Copyright:
© (2020) by the Economics Department of the University of Pennsylvania and the Osaka University Institute of Social and Economic Research Association

All Science Journal Classification (ASJC) codes

Economics and Econometrics

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10.1111/iere.12493

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title = "HOMEOWNERSHIP AND HOUSING TRANSITIONS: EXPLAINING THE DEMOGRAPHIC COMPOSITION",

abstract = "We document the evolution of homeownership rate across various age groups for the period 1995–2015. We find that variations in the homeownership rates are relatively large for the young, which is mostly driven by renter-to-owner transitions. In order to explain these empirical facts, we consider a life-cycle model featuring housing tenure decisions. Housing is modeled as an indivisible and lumpy investment subject to both loan-to-value (LTV) and debt-to-income (DTI) credit constraints and transaction fees. Our analysis suggests that variations in the DTI limit play a crucial role in accounting for the uneven behavior across age groups.",

author = "Eunseong Ma and Sarah Zubairy",

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AB - We document the evolution of homeownership rate across various age groups for the period 1995–2015. We find that variations in the homeownership rates are relatively large for the young, which is mostly driven by renter-to-owner transitions. In order to explain these empirical facts, we consider a life-cycle model featuring housing tenure decisions. Housing is modeled as an indivisible and lumpy investment subject to both loan-to-value (LTV) and debt-to-income (DTI) credit constraints and transaction fees. Our analysis suggests that variations in the DTI limit play a crucial role in accounting for the uneven behavior across age groups.

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HOMEOWNERSHIP AND HOUSING TRANSITIONS: EXPLAINING THE DEMOGRAPHIC COMPOSITION

Abstract

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