Stuart Gabriel and Stuart Rosenthal have released a new report on housing trends in the U.S.  “They found that the increase in the homeownership rate in the middle of the last decade extended to all age groups but was most pronounced among individuals under age 30. These increases coincided with looser credit conditions that enhanced household access to mortgage credit, along with less risk-averse attitudes toward investment in homeownership. Following the crash, these trends have reversed and homeownership rates have largely reverted to the levels of 2000.”
The rent versus own decision is too “discrete”.  Why must you own 0% of it or 100%? Would our economy be in better shape if you could own 33% of your home or 78% of your home?  For some specific details about what I have in mind, you can read this. or this.
Listen, young people don’t want to own because they got burned really bad. Young people have to be increasingly mobile and ready to relocate. How many under 30 tenured professors are wandering around U of C? Right. So young people have to be more mobile than olds, so if they can’t sell their house easily they are screwed. So young people shouldn’t buy. It is that simple. They were told that housing always goes up, that they could just sell if they had to move, and they got burned. Won’t get fooled again.
Matthew Kahn: “The rent versus own decision is too “discreteâ€. Why must you own 0% of it or 100%? Would our economy be in better shape if you could own 33% of your home or 78% of your home? ”
First, many people do own a fraction; it’s called a ‘mortgage’. Second, owning (say)33% of one’s house is still a big difference from being a renter. Moving out is as complicated as it would be for a homeowner, and the partial ownership adds complications.
Matthew, those papers were written almost fifteen years ago. Who these days has ANY home equity to sell?
Won’t get fooled again.
I am still waiting for Matthew Kahn to post something that’s not silly.
Owning a fraction of a property: all the hassle of being full owner and none of the perks! That is a dumb idea, but hey, you’re an economist at UCLA so your blood runs blue and your ideas favor the wealthy. Of course young people were able to buy houses with looser credit, it is the only way with people graduating college with 20K or so in average debt. If you want home ownership to increase in the US you have one option: make college free/cheap and decrease the cost of housing. Can I be a faculty member now?
Owning a fraction of a property: “I wanted to paint my house ‘eggplant’ with white trim but the shareholders rejected that favoring more neutral earthtones.” I can’t wait for the future!
Just how does this differ from a non-amortizing mortgage with a stiff downpayment?