The Effect of the Probability of Marriage on Housing Demand for Single Women

This paper uses a simultaneous system of three equations to model housing choices for female-headed households (FHH). The system includes housing demand, the probability of owning, and the probability of marriage. Also, a wealth gap variable related to the downpayment constraint is measured and included in the tenure choice estimation. The probability of owning is lower for female householders anticipating marriage. The wealth gap significantly affects the home-ownership decision for all households, and wealth constrained FHHs are significantly more responsive to changes in the relative price of owning.     

Housing tenure choice: Evidence from time series

A model of tenure choice is specified and estimated. A simple expression to represent the expected rate of return on equity for a homeowner is developed. Also the influence of the federal housing subsidy programs is analyzed. Both, plus permanent income and the implicit rental price of owner-occupied housing, are important determinants of tenure choice. Other influences are the financing gap with the standard mortgage instrument in an inflationary environment, the number of children less than 18 per family, assets and liabilities, and mortgage credit terms. Finally, the changes in housing tenure choice over the estimation period are analyzed.     

Does Home Ownership by Parents Have an Economic Impact on Their Children?

This paper uses the Panel Study of Income Dynamics to explore the impact of housing on children's productivity through educational attainment and through their housing choices as adults after they leave their parent's home. After controlling for other factors that are normally hypothesized to affect an individual's education and earnings, we find that the average child of homeowners is significantly more likely to achieve a higher level of education and, thereby, a higher level of earnings. We also find that having controlled for the factors traditionally thought to influence an individual's choice of housing tenure, as well as other parental characteristics, the housing tenure of parents plays a primary role in determining whether or not the child becomes a homeowner.     

Homeowner Renovation and Repair: The Decision to Hire Someone Else to Do the Project

Renovation and repair expenditures are an important component of the U.S. housing market and have grown in importance relative to new construction as a source of housing supply. However, this aspect of the housing supply process is not well understood and the existing literature on the topic is relatively sparse. This paper focuses on one aspect of renovation and repair expenditures: the choice of a contractor job or a project mainly undertaken by the homeowner. The empirical work stresses the importance of looking at different categories of renovation expenditures separately. Household characteristics are important determinants of the homeowner's decision to hire someone else to do the work. Married couple households and other households with more adults are less likely to hire outside labor, all else equal. Higher household income and more years of education increase the probability of hiring outside labor. Black households have a significantly lower likelihood of performing their own renovations than white households with comparable characteristics and comparable housing units.     

Marital history and home ownership: Evidence from Australia

The relative cost of owning and renting housing and housing affordability have been clearly established as important determinants of home ownership. But the roles of marital status and history have been largely ignored. In this paper we show that both current marital status and past history affect ownership. Past history matters because wealth accumulation is greater among couple households than singles owing largely to economies of scale in housing consumption. Moreover, wealth is lost upon divorce. In effect, past marital history affects the affordability of owner housing. This result is shown in the estimation of model explaining wealth, leverage and tenure choice using Australian datasets.     

Tenure decisions,mortgage interest,and the spatial distribution of housing demand: A theoretical analysis

This paper develops a model for analyzing household tenure decisions and life cycle planning decisions that must be made simultaneously with housing location decisions. It is found that increases in the leverage sensitivity of mortgage interest structures lead to flatter housing gradients within the city. We examine conditions under which households tend to move further from the center with age and income and under which home purchasers will tend to outbid renters at distances further from the center.     

The demand for housing in Sweden: Equilibrium choice of tenure and type of dwelling

Most studies of housing demand and tenure choice only identify two modes of tenure: owner-occupied one-family houses and rental apartments. Furthermore they are typically based on a cross section across all households. In this study we use recent Swedish data to overcome these weaknesses. We identify owner-occupied apartments (coop shares) as a third mode of tenure, and show that this should be treated separately. We also use information about the household's own assessment of its probability of moving during the next year. We demonstrate that it makes a large difference if likely movers are eliminated from the sample.     

Do homeowners achieve more household wealth in the long run?

Despite the public’s faith in homeownership as a vehicle for wealth creation, there are surprisingly few empirical studies of the independent impact of homeownership and its duration on household wealth accumulation. This paper provides the first empirical evidence that homeownership, after controlling for other drivers of wealth accumulation, is positively and significantly associated with wealth accumulation over time. Using the Panel Survey of Income Dynamics, it examines the influence of housing tenure choices between 1989 and 2001 on household net wealth levels in 2001 after controlling for initial wealth in 1989, location, income, education, and other family and personal characteristics that might influence the rate of wealth accumulation. Importantly, the models used also control for the tendency of households to accumulate wealth between 1984 and 1989 (five years prior to the studied period). This approach is used to address the possibility that an unobserved variable—the propensity to save or accumulate wealth—may be associated with both the probability and duration of homeownership and the rate of wealth accumulation. All else equal, those who owned homes and owned for longer periods of time had significantly higher household net wealth by 2001. These results are compelling because house price appreciation over the period was near its long-run average while stock gains were above and real rent increases below their long-run averages. Hence, the findings are suggestive of a positive influence of ownership over long periods on net wealth, even during a period when alternative investments produced higher than normal returns and rents grew slowly. This is especially important because the overwhelmingly majority of households do not sell their homes shortly after buying them. In our sample, those who became owners typically owned for 7 years. Furthermore, most households that bought during a period of declining real home values in the early 1990s continued to own their homes for at least eight years and came out well ahead of those who did not own.     

The Federal Housing Administration (FHA), tenure choice,and residential land use

This paper extends the standard, urban, residential land-use model to analyze the effects of Federal Housing Administration (FHA) mortgage insurance. On the demand side, households are differentiated by income and tenure; on the supply side, the cost of housing is related to the asset prices of land and structure and the cost of capital. Hypothesizing that capital cost is a function of household tenure and income, tenure is chosen to minimize this cost. The effect of FHA, then, is to expand the housing consumption of moderate-middle income households, by reducing their capital cost, while displacing those whose cost is not reduced.     

住房交易约束与农户习惯形成

本文分析了现行农村住房制度对农户习惯偏好的影响。利用2000~2008年中国29个省区市的农村住户调查数据得到的估计结果表明,住房交易约束是中国农户习惯形成的重要原因,但不是唯一原因。由于不能通过市场进行交易、不能作为抵押物而获得贷款,中国农户的住房资产不仅未能产生显著的财富效应,反而降低了农户的短期边际消费倾向。     

Household wealth accumulation and portfolio choices in Korea

This paper constructs a quantitative lifecycle model with uninsurable labor income and housing return risk to investigate how Korean households make saving and portfolio decisions. The model not only incorporates the special roles housing plays in the portfolio of households: collateral, a source of service flows, as well as a source of potential capital gains or losses, but also adds to existing models of wealth accumulation some unique institutional features present in Korea, namely the rental system (‘chonsae’) and the lack of a mortgage system. When the model is calibrated to match the Korean economy, several key features of the data are better able to be reproduced. The paper also analyzes the role of institutional features by comparing several alternative housing market arrangements to assess their impact on wealth accumulation, portfolio choices, and homeownership. A 10 percentage points reduction in down-payment requirement is associated with approximately 1 percentage point increase in the aggregate homeownership ratio in Korea. Lower down-payment also increases the fraction of aggregate wealth held in housing assets but lowers aggregate net worth with mixed demographic implications.     

‘House poor’ or simply ‘poor’?

This paper defines a set of indicators for distinguishing housing affordability problems resulting from high rents from those chiefly arising from low income. In place of the common ratio of rent to income, it uses a residual income indicator with indicators of over-consumption and over-paying for housing services. The indicators are computed for a sample of renter households in Switzerland, one of the countries with the greatest rental share. They help define more precisely who needs general income assistance and who needs specific housing aid (only one fourth of the former).     

Racial gaps in the transition to first-time homeownership: The role of residential location

Evidence suggests that African Americans wait longer to transition into first-time homeownership than white households with similar endowments. This paper relies on data from the Panel Study of Income Dynamics (PSID) to examine the contribution of residential location toward the black–white gap in first-time homeownership transitions. For a sample of young renters who first left their parents' home during the period 1978 through 1987, I estimate continuous time duration models that explain racial gaps in rental tenure durations prior to first-time homeownership as a function of individual, household, and location-specific covariates. I find that while several residential location characteristics, particularly those associated with the supply of affordable owner-occupied housing, impinge upon racial gaps in first-time homeownership transitions, most of the racial gap in homeownership transitions would be eliminated if blacks and whites had similar individual and household characteristics.     

Analyzing the Relationships among Race,Wealth, and Home Ownership in America

This paper presents new evidence on the determinants of the large disparities in home ownership by race in the U.S. Consistent with results first reported by P. Linneman and S. M. Wachter (1989,AREOFA J.7, No. 4, 389–402), we find noceteris paribusracial differences in ownership rates among white and minority households who possess sufficient wealth to meet down payment and closing cost requirements associated with standard mortgage underwriting criteria. However, substantial racial differences among wealth-constrained households exist, with constrained whites owning at higher rates than observationally equivalent minority households. Because minorities are disproportionately constrained by wealth-related underwriting standards, these differentials apply to roughly one-third of the white households in our samples and well over one-half of the minority sample. A multinomial model that treats central city versus suburban location as a choice variable in addition to tenure status is also estimated. The results show that even among households unconstrained by wealth-related underwriting considerations, minorities are much more likely than whites to own in central city locations. Thus, while controlling for wealth constraint status does eliminate tenure choice differences among the unconstrained, location differences remain for this group. They also are present among constrained households. Given the disparate fortunes of central city and suburban land markets in many metropolitan areas, this racial location pattern of ownership may have important long-run impacts on wealth distribution by race.     

Retirement and housing adjustment in later life: evidence from the British Household Panel Survey

Using data from the first five waves of the British Household Panel Survey (BHPS), we examine the extent and determinants of residential mobility for persons aged 55 or older, plus the subsequent housing adjustments made by those who move. The dimensions of adjustment examined are house value and rental costs, the number of `excess' rooms, and housing tenure. Relatively few individuals move house in later life in Britain. Choices do respond to one's own retirement, but other household changes such as loss of spouse and spouse leaving employment are also important. When a residential move is made, there is a tendency for housing consumption to change in a direction consistent with the correction of a disequilibrium position.     

Living on a plot of land as a tenure choice: The case of Panama

In this paper, we use analyze data from a survey of over thirteen hundred household housing-tenures in Panama. Our objective is to identify the features which determine whether households in a developing country such as Panama choose to rent or to buy housing properties, or alternatively to seek somewhat alternative tenure arrangements. In particular, we investigate the common characteristic of Panamanian households undertaking plot purchases with a view to future building. In order to analyze these alternative tenure arrangements we develop a series of log-linear models, in which dichotomous rent-versus-buy models are extended to include the possibility of plot purchasing with a view to future building. The extended models including plot purchases are seen to be superior to the dichotomous rent-versus-buy model in identifying which household characteristics are associated with particular housing-tenure decisions.     

House price appreciation, liquidity constraints, and second mortgages

This paper analyzes how households use second mortgages in response to shocks to housing wealth. Two related questions are examined: Do households use home equity in response to house price appreciation? Are liquidity constraints important for homeowners? A theoretical model shows that liquidity-constrained households respond more strongly to house price changes than unconstrained households. Using PSID, I find noteworthy differences in borrowing patterns of homeowners by the ratio of wealth to income. Low wealth-to-income homeowners exhibit a strong reaction to house price appreciation, whereas high wealth-to-income ones do not. The results indicate the importance of liquidity constraints among homeowners.     

NO CHOICE: REFORMING SOCIAL HOUSING IN ENGLAND

This paper considers the current and future prospects for social housing. It looks at the key issues of choice and affordability that dominate housing policy, how this links social housing to the dominant tenure of owner-occupation and how government has sought to control social housing allowing for a managed decline of the sector. The final part of the paper proposes some reforms which will introduce real choice into rented housing and empower low-income households. This, however, will necessitate the end of social housing as a distinct tenure.     

House price appreciation,liquidity constraints,and second mortgages

This paper analyzes how households use second mortgages in response to shocks to housing wealth. Two related questions are examined: Do households use home equity in response to house price appreciation? Are liquidity constraints important for homeowners? A theoretical model shows that liquidity-constrained households respond more strongly to house price changes than unconstrained households. Using PSID, I find noteworthy differences in borrowing patterns of homeowners by the ratio of wealth to income. Low wealth-to-income homeowners exhibit a strong reaction to house price appreciation, whereas high wealth-to-income ones do not. The results indicate the importance of liquidity constraints among homeowners.     

A comparison of household mobility for owned manufactured,traditional owned,and rental units using the American Housing Survey

This study employs data from the national sample of the American Housing Survey to analyze the mobility decisions of families in owned manufactured housing in comparison to families in traditional owned homes and rental units. Specifically a continuous time probability model (CTM) is used to estimate the likelihood of these families moving over the period of 1993–2001. In general, the empirical work suggests that families occupying both owned manufactured housing and traditional owned housing are associated with lower probabilities of moving than comparable households in rental units. Of particular interest is the fact that, ceteris paribus, families in both traditional owned homes and owned manufactured housing exhibit negative duration dependence, or a decreasing probability of moving over time, while for those in rental units duration dependence is positive. These differences are important because of their potential implications for long-term neighborhood stability and, as such, the viability of manufactured housing as an affordable housing alternative for lower income families.