Housing Affordability and Parental Income Support

Jason Allen, Kyra Carmichael, Robert Clark, Shaoteng Li and Nicolas Vincent

Staff Working Papers from Bank of Canada

Abstract: In many countries, the cost of housing has greatly outpaced income growth, leading to a housing affordability crisis. Leveraging Canadian loan-level data and quasi-experimental variation in payment-to-income constraints, we document an increasing reliance of first-time homebuyers on financial help from their parents, through mortgage co-signing. We show that parental support can effectively relax borrowing constraints—potentially to riskier borrowers.

Keywords: Housing; Financial services; Financial system regulation and policy (search for similar items in EconPapers)
JEL-codes: D64 E21 E24 G18 G51 (search for similar items in EconPapers)
Pages: 48 pages
Date: 2024-07
New Economics Papers: this item is included in nep-ure
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Persistent link: https://EconPapers.repec.org/RePEc:bca:bocawp:24-28

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