Homeownership and the American Dream
By L. Goodman, C. Mayer. 2018
230 citations recorded by the source corpus.
For decades, it was taken as a given that an increased homeownership rate was a desirable goal. But after the financial crises and Great Recession, in which roughly eight million homes were foreclosed on and about $7 trillion in home equity was erased, economists and policymakers are re-evaluating the role of homeownership in the American Dream. Many question whether the American Dream should really include homeownership or instead focus more on other aspects of upward mobility, and most acknowledge that homeownership is not for everyone. We take a detailed look at US homeownership from three different perspectives: 1) an international perspective, comparing US homeownership rates with those of other nations; 2) a demographic perspective, examining the correlation between changes in the US homeownership rate between 1985 and 2015 and factors like age, race/ethnicity, education, family status, and income; 3) and, a financial benefits perspective, using national data since 2002 to calculate the internal rate of return to homeownership compared to alternative investments. Our overall conclusion: homeownership is a valuable institution. While two decades of policies in the 1990s and early 2000s may have put too much faith in the benefits of homeownership, the pendulum seems to have swung too far the other way, and many now may have too little faith in homeownership as part of the American Dream.
Subfields: Accounting, Economics and Econometrics, Finance
View Paper: https://www.semanticscholar.org/paper/e78785db877c82dca038ad9640d8524629152b3e
How researchers see this paper
The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.
In Accounting
In Economics and Econometrics
In Finance
Citations in the corpus
- Disparities in Wealth by Race and Ethnicity in the 2019 Survey of Consumer Finances (2020, background): “…other hand, homeownership has also been found to yield strong financial returns on average and to be a key channel through which families build wealth (Goodman and Mayer 2018).10 Life-cycle patterns of homeownership by age and by race and ethnicity are similar to the patterns of wealth (Figure 3).”