Acquisition capital: using a new concept to explore housing outcomes among millennials in the United States

Abstract

What resources help young people secure homeownership and housing wealth? We combine findings from two literatures, one which emphasizes the role of income, education, and inheritances and one which emphasizes the role of financial strategies, to evaluate whether a more comprehensive set of resources help young people aged 18–45 navigate the housing market in the United States. Using the 2019 Survey of Consumer Finances (SCF) and through logistic and Heckman regressions, we identify three main findings. First, financial strategies such as financial knowledge, credit card access, and financial risk-taking help explain homeownership and housing wealth for young people, over and above traditionally studied household and family resources. These are especially important for middle-income households. Second, different financial strategies matter for homeownership versus housing wealth. Third, ‘optimal’ financial strategies like good savings habits may not always be associated with success in the housing market. Combined, these findings imply that while in theory young people can leverage resources beyond their own income or the ‘Bank of Mum and Dad’, in practice the ideal combination is complex. To capture this complexity, we introduce the term ‘acquisition capital’ to represent the multiple sets of resources that young people leverage to secure homeownership and housing wealth.