Class differences in homeownership and mortgage debt burden across cohorts: the Israeli case

Abstract

This study investigates class inequality in homeownership and the mortgage debt burden of young adults (aged 25–35) in Israel, from the present cohort and from the 1980s. These two time points reflect the shift from a social-welfare system to a neoliberal regime. Data was drawn from the Household Expenditure Survey for the periods 1975 and 1980, as well as 2012–2013 (Israel CBS). The findings reveal that while gaps between the probability of mortgaged homeownership and outright ownership have remained remarkably stable for the low-income and middle-income classes, the high-income class has substantially improved its probability of mortgaged homeownership and decreased its probability of non-homeownership. Furthermore, the middle class has the highest mortgage debt burden. However, in late young adulthood (ages 30–40), the low class is saddled with a higher mortgage debt burden relative to income than the middle class, residing in locations with lower socio-economic status. Moreover, the high class has a higher mortgage debt burden than the middle class, when residing in areas with higher socio-economic status. This practice increases the latter’s wealth prospects and shows the financial burden imposed upon the low class in order for its members to have ‘a roof over their head’.