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Working Papers, No. 2009-01, March 2009
Why Has Home Ownership Fallen among the Young? (REVISED February 2010)

The authors document that homeownership of households with "heads" aged 25 to 44 years fell substantially between 1980 and 2000 and recovered only partially

during the 2001-05 housing boom. The 1980-2000 decline in young homeownership occurred as improvements in mortgage opportunities made it easier to purchase a home. This paper uses an equilibrium life-cycle model calibrated to micro and macro evidence to understand why young homeownership fell over a period when it became easier to own a home. Our findings indicate that a trend toward marrying later and the increase in household earnings risk that occurred after 1980 account for 3/5 to 4/5 of the decline in young homeownership.

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