Predicting the longitudinal patterns of housing affordability stress: Evidence from the Korea Welfare Panel Study

Abstract

As housing costs increase faster than salary and wage growth worldwide, housing affordability stress (HAS) becomes an increasingly crucial urban problem. However, little evidence exists on under what preconditions HAS experiences are likely to be persistent. This study examines the predictors of chronic forms of HAS experiences in the Korean housing market, characterized by a unique tenure system represented by Jeonse renting (i.e., renting only with a security deposit) and severe regional disparities between the Capital region and the rest of the country. After classifying the longitudinal patterns of HAS between 2011 and 2020, we examine under which preconditions between 2007 and 2010 households were likely to experience chronic forms of HAS. The results reveal that certain combinations of household income, housing tenure choice, and location of residence significantly heighten the probability of experiencing chronic forms of HAS. This study contributes to the literature by highlighting the importance of the longitudinal view of HAS experiences and expanding knowledge about the potential mechanisms that drive chronic forms of HAS.