Ownership, Rental Costs, and the Prospects of Building Home Equity: An Analysis of 100 Metropolitan Areas

Hye Jin Rho, Dean Baker and Danilo Pelletiere ()

CEPR Reports and Issue Briefs from Center for Economic and Policy Research (CEPR)

Abstract: This report compares the ownership and rental costs in 100 major U.S. metropolitan areas. Extending the work from a previous CEPR/NLIHC paper, "The Cost of Maintaining Ownership in the Current Crisis: Comparisons in 20 Cities," this study, while demonstrating the wide diversity in housing markets across the nation, finds that in many areas, homeownership costs are in line with rental costs. In these areas, it is practical and desirable to focus on policies that keep homeowners in their homes. The report goes on to show that in bubble-inflated markets, however, homeownership is not only a costly and risky proposition, but continuing price declines mean that homeowners will not accrue any equity. The authors suggest that policy makers should be sure to consider affordable rental options as part of the solution when drafting proposals to help households in these markets.

Keywords: housing bubble; homeownership; housing policy (search for similar items in EconPapers)
JEL-codes: G G21 G28 L85 R R21 (search for similar items in EconPapers)
Pages: 17 pages
Date: 2008-05
New Economics Papers: this item is included in nep-geo and nep-ure
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Persistent link: https://EconPapers.repec.org/RePEc:epo:papers:2008-14

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