Partial Homeownership: A Quantitative Analysis

Eirik E. Brandsaas and Jens Kvaerner ()
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Eirik E. Brandsaas: https://www.federalreserve.gov/econres/eirik-e-brandsaas.htm
Jens Kvaerner: https://www.tilburguniversity.edu/staff/j-s-kvaerner

No 2024-070, Finance and Economics Discussion Series from Board of Governors of the Federal Reserve System (U.S.)

Abstract: Partial Ownership (PO), which allows households to buy a fraction of a home and rent the remainder, is increasing in many countries with housing affordability challenges. We incorporate an existing for-profit PO contract into a life-cycle model to quantify its impact on homeownership, households’ welfare, and its implications for financial stability. We have the following results: 1) PO increases homeownership rates. 2) Willingness to pay increases with housing unaffordability and is highest among low-income and renting households. 3) PO increases aggregate debt as renters become partial owners but also reduces the average leverage ratios as indebted homeowners become partial owners.

Keywords: Partial Homeownership; Housing Affordability; Financial Innovation; Financial Stability (search for similar items in EconPapers)
JEL-codes: E20 E21 G23 G28 R20 (search for similar items in EconPapers)
Pages: 63 p.
Date: 2024-08-28
New Economics Papers: this item is included in nep-dge and nep-ure
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Persistent link: https://EconPapers.repec.org/RePEc:fip:fedgfe:2024-70

DOI: 10.17016/FEDS.2024.070

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