What are the Perceived Barriers to Homeownership for Young Adults?

Samuel Dodini, Jeff Larrimore and Jenny Schuetz

No 2016-021, Finance and Economics Discussion Series from Board of Governors of the Federal Reserve System (U.S.)

Abstract: As the U.S. emerges from the Great Recession, there is concern about slowing rates of new household formation and declining interest in homeownership, especially among younger households. Potential reasons that have been posited include tight mortgage credit and housing supply, changing preferences over tenure in the wake of the foreclosure crisis, and weak labor markets for young workers. In this paper, we examine how individual housing choices, and the stated motivations for these choices, reflect local housing affordability and individual financial circumstances, focusing particularly on young households. The analysis makes use of new individual-level data from the Survey of Household Economics and Decisionmaking (SHED). We find that housing affordability is correlated with county-level tenure rates and individual-level probability of homeownership for households with heads under age 40. However, it appears that young households' perceived barriers to homeownership are more closely related to individual financial circumstances than local housing market conditions.

Keywords: Housing demand; consumer preferences; household formation; tenure choice (search for similar items in EconPapers)
JEL-codes: D10 R1 R21 R31 (search for similar items in EconPapers)
Pages: 31 pages
Date: 2016-03-08
New Economics Papers: this item is included in nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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http://www.federalreserve.gov/econresdata/feds/2016/files/2016021pap.pdf DOI (application/pdf)
http://dx.doi.org/10.17016/FEDS.2016.021

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Persistent link: https://EconPapers.repec.org/RePEc:fip:fedgfe:2016-21

DOI: 10.17016/FEDS.2016.021

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