Homeownership Rates Research Articles

PROPERTY PURCHASE: ISSUES AND CHALLENGES FACING BY FIRST HOUSE BUYERS IN MALAYSIA DURING COVID-19 PANDEMIC (YEAR 2020-2022)

This article intended to identify issues and challenges facing by first house buyers when they are buying first house in Malaysia. Theresults from this article can provide insights to related stakeholders in helping first house buyers to come up with better policies. Withthe development of the economy, housing prices are still unaffordable and are gradually rising every year. However, household income has not increased accordingly, which is the main problem affecting Malaysians’ difficulty in affording a house. Previously the Malaysian homeownership rate is already declining due to the expensive house price where the COVID-19 pandemic has caused a severe downturn to Malaysia, especially the housing market which has been affected poorly. This article adopted quantitative research method where the primary data was collected through questionnaire surveys. The sample size was determined by referring to Krejcie and Morgan method. The questionnaires are distributed through internet platforms such as Facebook, Instagram, and WhatsApp to collect more responses as online survey brings convenience to respondents. 155 responds were collected from the respondents. From the results, unstable financial positions, unemployment rate, difficulty in obtaining loans, and location factors are the first house buyers’ main issues and challenges. These factors required intervention from the government to save the economy through several policies. Since majority of first house buyers are not familiar with the issues and challenges that they need to consider before making the decision to purchase their first house, this article’s outcomes help first house buyers to do decisions by discussing the issues and challenges that need to be considered. Furthermore, the outcomes can be referred to once the first house buyers encounter similar situations as the results can be used as guidance to help them to understand the problems.

Lost in Transition: A Cohort Analysis of Catch‐Up in Homeownership in Australia*

We study how housing market conditions shape the housing careers of Australians. Utilising data from the Australian Census spanning from 1991 to 2021, we observe significant differences in ownership rates at age 30 across birth cohorts. Moreover, these differences widen significantly as housing affordability falls. Using synthetic cohort techniques, we evaluate the persistence of these differences. Our results reveal that while the homeownership rates of younger cohorts ‘catch up’ somewhat with those of their older counterparts, a substantial gap remains at age 50. Early access to homeownership is also linked to the ownership of larger homes by middle age. Our study underscores the long‐term consequences of housing market conditions on homeownership trajectories.

Understanding the Housing Acquisition Behavior of Muslim Generation Y in Malaysia: A Conceptual Framework Based on ABC Theory

House is the most important basic need for the human survival, however many people especially those who are categorised in the category of generation Y do not acquire a house due to various factors (internal salient belief factors, personal factor, and extra factor). In accordance, the volume of residential transaction and homeownership rate among youths in Malaysia has been decreasing for the past few years. It is proven as the number of residential property transaction has dropped from 272,669 transactions in 2012 to 250,586 transactions in 2023. Thus, it is important to examine the behavior of generation Y towards house acquisition in Malaysia. This study focuses on Muslim Generation Y in West Malaysia, specifically on those who have purchased a home and those who have not. The research proposes to examine the internal salient belief factors (attitude and perceived religiosity on property), personal factors (lifestyles) as well as external factors (house features, house location, financing factors, and government support) in influencing house acquisition behavior among Muslim Generation Y in Malaysia. As such, this study proposes to adapt Attitude-Behavior-Context (ABC) theory in discovering the behavior.

Cross-Country Analysis of Inflation Experiences and Homeownership: A Qualitative Review

This qualitative literature review examines the relationship between inflation experiences and homeownership across countries. Drawing on a synthesis of existing research, the review explores how historical inflation contexts influence individuals' decisions to invest in real estate. Findings indicate that periods of high inflation often motivate individuals to view homeownership as a hedge against inflationary pressures, particularly in economies with volatile economic conditions. Institutional factors, such as mortgage market structures and housing policies, play a crucial role in shaping this relationship, influencing overall homeownership rates across different regions. Immigrant populations bring unique perspectives, as their housing decisions in host countries are influenced by inflation experiences in their countries of origin. The review highlights methodological diversity and calls for more longitudinal and cross-country studies to enhance the robustness and generalizability of findings. Addressing these dynamics can provide insights into effective policy interventions aimed at promoting sustainable housing markets globally.

Owning housing units versus owning the residence: The divergence between two types of homeownership rates in urban China since 2008

Urban housing is crucial for understanding socioeconomic inequality in transitional economies. In China, since the massive housing privatization, there has been a significant improvement in various aspects of urban housing. Official data and research articles report a substantial increase in urban homeownership rates. However, prevailing studies and media reports also reveal the growing difficulty for young people to attain homeownership. Hence, it is unclear whether it has become easier or harder for Chinese urban residents to become homeowners, and why. We propose differentiating between two types of homeownership: (1) ownership of an urban housing unit (broadly-defined homeownership), and (2) ownership of the housing unit in which one currently lives (narrowly-defined homeownership). The trends of these two types of homeownership rates have diverged since 2008. While the former rose because housing units were increasingly viewed as investment goods, the latter declined, which suggests that for new entrants into the housing market, it has become harder to own their residences. We draw on six waves of the Chinese General Social Survey (CGSS) between 2003 and 2018 for our empirical investigation. The findings substantiate our propositions. They reveal that young people's disadvantage is more salient in living in self-owned housing units than owning a housing unit, and this disadvantage has grown significantly since 2008. This study contributes to the emerging literature on housing inequality in transitional economies, particularly the housing disadvantages among young adults.

Immigrants, slums, and housing policy: The spatial dispersal of the Ethiopian population in Israel

Nearly 40 years after the first wave of Ethiopian immigration to Israel, the country’s Ethiopian population still suffers from significant socioeconomic disadvantage: Many of its members live in highly homogeneous poor neighborhoods, which expose them to a variety of negative externalities. This study is the first to examine empirically the impact of Israel’s policy of absorption and spatial distribution on the formation of homogeneous ghettos of Ethiopians, and the contribution of the government’s major housing assistance programs for Ethiopians to solving or exacerbating this problem. The study, structured into four main stages, embraces a mixed-methods research approach drawing on diverse theoretical and methodological frameworks. In the first stage, we use descriptive statistics to introduce the current characteristics of the Ethiopian population in Israel and compare them with those of other marginalized social groups. In the second stage, we analyze the government’s various housingassistance programs for the Ethiopian population, focusing on three flagship programs. The third stage analyzes the spatial outcomes of the primary housing-assistance program, which remains active to date. Lastly, through in-depth interviews with policymakers and Ethiopian leaders, we delve into the underlying considerations that lay behind the policy decisions made. The research findings indicate that Ethiopians experience social and economic disadvantages, yet their spatial situation seems to be better than that of other disadvantaged groups, because a significant part of this population apparently enjoys the advantages of living in the center of the country. The findings further show that while the various government housing-assistance programs have elevated homeownership rates among Ethiopians, they have not prevent the formation and proliferation of spatial concentrations of poverty. Nor have they ever provided both the means and the knowledge needed to enable Ethiopians households to enhance their quality of life by moving out of these neighborhoods. To truly address the problem of homogeneous concentrations of poverty, a holistic but tailor-made housing policy is essential. This policy should not simply mirroring the national housing policy, which focuses almost exclusively on homeownership, but rather incorporate diverse policy measures for different populations. A good and just housing policy must take into account the existing spatial dynamic and the core–periphery relations and ensure an environment that provides quality employment and education opportunities alongside social networks that the residents can leverage to increase their social, economic, and cultural capital. Otherwise, the government housing-assistance programs will continue to be mere lip service and too little, too late.

Impact of skills in early adulthood on lifetime homeownership disparities

This paper shows that skills acquired by early adulthood affect homeownership levels achieved later in life in important ways. The paper examines three sets of skills—cognitive skills, as measured by the Armed Forces Qualifying Test (AFQT) score; non-cognitive skills (specifically, the degree to which people believe that they have control over the outcome of events in their lives), measured by the Rotter score; and social skills, using a Social score based on Deming (2017). Mediation analysis is used to identify both the direct and indirect effects of these skills, as captured by the three different types of scores, on homeownership. We show that the AFQT score measuring cognitive skills not only captures direct effects on the homeownership rate, but even larger indirect effects through the mediator variables—education and income. AFQT scores in early adulthood are shown to be highly predictive of homeownership outcomes, explaining roughly one-quarter to one-third of the disparate outcomes between White, Black, and Hispanic households. We also examine the degree to which the AFQT, Rotter, and Social scores explain variation in homeownership rates over an individual's life cycle. The findings suggest that reducing disparities in educational outcomes would meaningfully contribute to reducing minority homeownership gaps.

PENSIONS, INCOME TAXES, AND HOMEOWNERSHIP: A CROSS‐COUNTRY ANALYSIS

AbstractThe article studies the role of pensions and income taxes in determining homeownership. We develop a stochastic, overlapping generations model with tenure choice and heterogenous skill types calibrated to Germany. Then, we simulate alternative income tax and pension policy structures from the United States and Australia, since these developed nations have similar incomes per capita, but highly different homeownership rates. Our results highlight that the pension system and its financing have decisive long‐term effects on homeownership. The latter is even more significant than income tax, where labor and capital income taxation affect homeownership in opposite directions.

Understanding Homeownership Rates: the Impact of Co-residence Patterns

The socio-demographic context, which includes the co-residence patterns associated with the decisions of young adults on whether to live in the parental household or enter homeownership or renting, is directly reflected in homeownership rates at the aggregate level as a consequence of these decisions. However, the way in which tenure statistics are reported also matters in this respect. This applies specifically to household-level statistics, which are most often used to characterise housing systems. It is therefore possible to ask whether countries with high homeownership rates and, simultaneously, high shares of adult children living with their parents are truly high-homeownership societies. This study identifies the countries for which the reported tenure statistics are more influenced by demographic conditions as compared to other countries. These are the Mediterranean countries and the Central and Eastern European countries (with some exceptions).

Enabling Industry 4.0 Technologies to Drive Sustainable Housing Delivery across the Housing Supply Value Chain in Saudi Arabia: Challenges and Prospects

The Saudi government has launched the Saudi Vision 2030 that aims to increase the home ownership rate to 70% by 2030 by taking the different sustainability goals into consideration. However, several challenges such as rapid urbanization and the gap between housing supply and demand are facing this goal. This study attributes the housing supply gap to KSA’s reductionist approach to the housing supply value chain (HSVC) and proposes adopting Industry 4.0 technologies. The study explores the challenges and prospects of integrating these technologies for sustainable housing delivery across the HSVC. Through action research, data were gathered via random sampling and analyzed using Statistical Package for Social Science version 24, incorporating a principal component analysis (PCA). The findings from the analysis identify key challenges such as data management infrastructure, construction industry regulations, uncertain housing delivery policies, and resistance to change. Despite these challenges, there is a strong potential for adopting Industry 4.0 technologies to achieve sustainable housing delivery. This study offers a blueprint for policymakers and housing industry leaders to develop a comprehensive strategy for adopting 4IR technologies in housing delivery, enhancing collaboration and driving progress towards Saudi Arabia’s sustainable housing goals.

Life after (soft) default

Soft default, defined as a delinquency of 90 days or more, is a relatively common event in the credit market, in 2010 such episodes affected about 3 million individuals. Yet we lack a detailed understanding of what happens afterward. We use credit report data, on approximately 2 million individuals from 2004 to 2020, to shed light on individual trajectories after such event, and document enduring negative impacts. These effects persist for up to ten years post-event and manifest in lower credit scores, reduced total credit limits, lower homeownership rates, lower income, and relocation to less economically active zip codes. It appears that those who are overextended in their mortgage lines, and with larger delinquent amounts, suffer the harshest consequences.

Analyzing racial disparities in the United States homeownership: A socio-demographic study using machine learning

While increasing homeownership has been a focal point for policymakers in the United States, the distribution of access to homeownership opportunities across all families within the country has not been equitable. The complex relation between social factors and economic conditions has significantly shaped the journey toward homeownership. Of particular concern is the persistent disparity in homeownership rates among Black households in the United States. Effectively addressing these disparities within urban communities necessitates comprehensive policy interventions and social initiatives. However, the success of such endeavors hinges upon a comprehensive grasp of the underlying causes of these inequalities. Drawing upon machine learning techniques, our analysis of national American Housing Survey data reveals clear evidence for the multifaceted and socio-demographic nature of racial disparities in homeownership within the United States. Our findings provide evidence for two previously obscured patterns. First, we observe that race-related risk factors, separate from household characteristics, are heterogeneous, not uniformly affecting all households. Specifically, our analysis highlights: (1) there is a geographical variations in how race-related risk factors contribute to racial inequality, and (2) households with lower educational attainment are potentially at increased risk of discrimination. Second, our findings underscore the potential of policies and social programs aimed at enhancing educational attainment to bridge the racial gap through two mechanisms: (i) mitigating vulnerability by alleviating race-related risk factors, and (ii) suppressing the compounding effects of racial disparities.

The role of social effects in shaping beliefs about the economy

Abstract We use survey data to demonstrate that individuals extrapolate from their social environment when forming estimates about aggregate economic outcomes (e.g. the aggregate homeownership rate). In a first approach, we follow the previous literature and construct hypothetical peer groups using information on the location, age, and education of respondents. We confirm that the average homeownership rates in these ‘constructed peer groups’ affect respondents’ subjective estimates of national homeownership rates. In a second approach, we extend the previous literature and utilize direct information provided by survey participants about the characteristics of their peer groups. We show that these ‘self-assessed peer groups’ are even better predictors for how survey respondents assess the aggregate measure. We show that the same mechanisms are at work for estimates of the national unemployment rate. We also demonstrate that individuals who are less knowledgeable about economic matters rely more on peer group information.

Wealth inequality and the distributional effects of maximum loan-to-value ratio policy

Macroprudential policy improves economic outcomes by reducing the likelihood and severity of financial crises. Yet, are there unintended long run consequences to the introduction of a macroprudential policy regime, and are they conditional on the level of wealth inequality? I answer these questions by looking at the effect of a reduction in the maximum loan-to-value (LTV) ratio on homeownership rates, house prices and housing wealth inequality across two economies with different initial wealth dispersion. I use a heterogeneous agent model in which households face an endogenous borrowing limit in the form of a collateral constraint. A reduction in the LTV limit tightens the borrowing constraint and changes the levels of wealth at which households rent or become constrained or unconstrained owners. The key finding of this paper is that initial conditions matter; a greater share of households is affected when wealth is distributed more equally. This larger impact on aggregate demand leads to a stronger fall in house prices and a larger rise in the share of constrained homeowners and housing wealth inequality. The effects are also non-linear in the LTV ratio, with progressively stronger effects at lower LTV ratios.

Estimating the importance of monetary policy shocks for variation in the U.S. homeownership rate

Being a homeowner is one of the tenets of the American dream. In general, relative to renting, people see homeownership as a path to wealth through the usual appreciation of the house prices and the forced savings through mortgage payments but also a path to financial stability through more stable and predictable housing costs (Young et al., 2023).

LGBTQ+ Homeownership in the United States

LGBTQ+ adults had a lower homeownership rate (53 percent) than non-LGBTQ+ adults (72.5 percent). Looking at LGBTQ+ subgroups by sexual orientation and gender identity revealed important nuances. Transgender people and bisexual people had the lowest homeownership rates. Lesbian cis women had a higher rate of homeownership than gay cis men, whereas in other sexual orientation groups cis men had higher rates than cis women. Transgender people of all sexual orientations, except straight, were between 6 and 12 percentage points less likely to own a home than straight cis men, and lesbian cis women were 4 percentage points less likely.

Homeownership, the unemployed and financial hardship

We follow 3,826 Australian unemployed persons, approximately half of whom are homeowners. We conduct a matching analysis and find that homeownership reduces both experienced and perceived financial hardship. Building on recent findings in the literature that the presence of financial hardship deteriorates job search quality (i.e., stressors like financial hardship lead to the adoption of haphazard rather than focused job search strategies), we introduce financial hardship as a novel channel through which homeownership affects labour market outcomes of the unemployed. In our matching analysis, we include historical labour market performance and personality traits linked to mobility preferences, to address endogeneity. We also confirm that homeownership reduces residential mobility and increases neighbourhood social capital but find no effect on reservation wages of the unemployed. Considering declining homeownership rates across the OECD in recent years, our findings are both timely and imperative to understand the effect of homeownership on labour market outcomes of the unemployed.

Rent or Buy? Inflation Experiences and Homeownership within and across Countries

ABSTRACTWe show that past inflation experiences strongly predict homeownership within and across countries. First, we collect novel survey data, which reveal inflation protection to be a key motivation for homeownership, especially after high inflation experiences. Second, using household data from 22 European countries, we find that higher exposure to historical inflation predicts higher homeownership rates. We estimate similar associations among immigrants to the United States who experienced different past inflation in their home countries but face the same U.S. housing market. Consistent with the experience effects model, the relationship is strongest in countries with predominantly fixed‐rate mortgages.

Homeownership of young adults in Austria from a national and regional perspective since 2010 – a fading dream?

Since around 2008 there has been a sharp decline in homeownership rates in many OECD countries, particularly among young adults. This may reflect changing preferences for more flexible housing options or a decline in affordability due to a combination of house price increases and more difficult access to finance (mortgage loans, deteriorating labour market conditions, insufficient income, etc.). We first examine how these trends affect Austria as a whole and then focus on two regions with long-term policy strategies to promote homeownership through tailored housing subsidy programmes (Lower Austria, Vorarlberg). We use survey data from three sources (Microcensi, EU-SILC, HFCS) and regional administrative data. Our results show that young adults (up to 35) are less likely to become homeowners in 2020 than in 2010, although this is more pronounced for the middle-aged (35–49) than for younger people. We show that the analysis at national level is insufficient, as there are large differences between regions and between types of dwelling. Focusing on the regional level reveals that price dynamics in urban areas, which exceed income developments, appear to be the main drivers. As young households participate less in homeownership than previous generations, this points to a latent and deepening problem of intergenerational equity. Current regional policies to promote homeownership do not reach the necessary scale to counteract the dominant market trends. We discuss regional policy options that make use of the Austrian housing policy framework and focus on increasing the overall supply of housing rather than exclusively on demand-side measures.

Individual and Neighborhood Level Predictors of Children’s Exposure to Residential Greenspace

Inequities in urban greenspace have been identified, though patterns by race and socioeconomic status vary across US settings. We estimated the magnitude of the relationship between a broad mixture of neighborhood-level factors and residential greenspace using weighted quantile sum (WQS) regression, and compared predictive models of greenspace using only neighborhood-level, only individual-level, or multi-level predictors. Greenspace measures included the Normalized Difference Vegetation Index (NDVI), tree canopy, and proximity of the nearest park, for residential locations in Shelby County, Tennessee of children in the CANDLE cohort. Neighborhood measures include socioeconomic and education resources, as well as racial composition and racial residential segregation. In this sample of 1012 mother–child dyads, neighborhood factors were associated with higher NDVI and tree canopy (0.021 unit higher NDVI [95% CI: 0.014, 0.028] per quintile increase in WQS index); homeownership rate, proximity of and enrollment at early childhood education centers, and racial composition, were highly weighted in the WQS index. In models constrained in the opposite direction (0.028 unit lower NDVI [95% CI: − 0.036, − 0.020]), high school graduation rate and teacher experience were highly weighted. In prediction models, adding individual-level predictors to the suite of neighborhood characteristics did not meaningfully improve prediction accuracy for greenspace measures. Our findings highlight disparities in greenspace for families by neighborhood socioeconomic and early education factors, and by race, suggesting several neighborhood indicators for consideration both as potential confounders in studies of greenspace and pediatric health as well as in the development of policies and programs to improve equity in greenspace access.