This research project has two main objectives. The first one is to use large variations in home ownership trends witnessed in the United States from 1980 to 2000 to identify underlying factors that drive households' tenure decision and demand for housing. The second objective is to explore how these factors interact to produce changes in housing market volatility.
Over the past 25 years or so, there have been dramatic changes in housing and mortgage markets, including financial deregulations, broader access to credit, important changes in homeownership, and the recent large increase in mortgage foreclosures.
These recent events not only brought the housing market at the forefront of daily news, but also highlighted the need to advance our understanding of this market in order to fully grasp the causes and consequences of these developments as well as potential policy responses.
They also suggest that effort should be directed toward understanding the distribution of home owners in society, in particular because the housing market appears to be largely driven by potential as well as recent first-time home buyers. It thus seems crucial to understand the underlying reasons behind households' tenure decision, that is, their decision to own or rent.