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Title: Home Ownership, Savings, and Mobility Over the Life Cycle

Citation Type: Miscellaneous

Publication Year: 2009

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Abstract: Despite the importance of understanding home ownership, there exists little consensus atto why many young households rent despite the lower user-cost of owning. In a Bewley modelwith endogenous price volatility, mobility, and home ownership, we assess the contributionof nancial constraints, housing illiquidities and house price risk to home ownership over thelife cycle. We show the existence of a nite dimensional state space, steady state equilibriumwith stochastic prices. The calibrated economy is able to explain most of the rise in homeownership over the life cycle. We nd that, while some young households rent due to borrowingconstraints in the mortgage market, the prole of earnings and desire for mobility are moreimportant determinants of the ownership rate.

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Authors: Vasudev, Santhanagopalan; Halket, Jonathan

Publisher: New York University

Data Collections: IPUMS USA

Topics: Housing and Segregation, Other, Poverty and Welfare

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