IDEAS home Printed from https://ideas.repec.org/a/fip/fedcec/88202.html
   My bibliography  Save this article

Intergenerational Homeownership and Mortgage Distress

Author

Listed:
  • Nicholas Fritsch
  • Rawley Heimer

Abstract

Rates of US homeownership have declined in the past two decades, and the decline has been especially pronounced for young adults. Motivated by recent research that explores the ways in which personal experiences can affect financial attitudes and beliefs, we explore whether the negative homeownership experiences of parents during the 2008 financial crisis could have caused their children to view homeownership less favorably. We find that parental mortgage distress negatively correlates with the probability that a child will purchase a home, and we explore various channels through which this link may occur.

Suggested Citation

  • Nicholas Fritsch & Rawley Heimer, 2020. "Intergenerational Homeownership and Mortgage Distress," Economic Commentary, Federal Reserve Bank of Cleveland, vol. 2020(12), pages 1-7, June.
    • Handle: RePEc:fip:fedcec:88202
    DOI: 10.26509/frbc-ec-202012
    as

    Download full text from publisher

    File URL: https://doi.org/10.26509/frbc-ec-202012
    File Function: Full Text
    Download Restriction: no
    File URL: https://libkey.io/10.26509/frbc-ec-202012?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Andrew F. Haughwout & Richard Peach & Joseph Tracy, 2017. "A Close Look at the Decline of Homeownership," Liberty Street Economics 20170217, Federal Reserve Bank of New York.
    2. Ulrike Malmendier & Stefan Nagel, 2011. "Depression Babies: Do Macroeconomic Experiences Affect Risk Taking?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 126(1), pages 373-416.
    3. Dettling, Lisa J. & Hsu, Joanne W., 2018. "Returning to the nest: Debt and parental co-residence among young adults," Labour Economics, Elsevier, vol. 54(C), pages 225-236.
    4. Zachary Bleemer & Meta Brown & Donghoon Lee & Wilbert Van der Klaauw, 2014. "Tuition, jobs, or housing: what's keeping millennials at home?," Staff Reports 700, Federal Reserve Bank of New York.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Bertrand Garbinti & Frédérique Savignac, 2021. "Intergenerational Homeownership in France over the 20th Century," Working Papers hal-03307589, HAL.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Pinka Chatterji & Xiangshi Liu & Barış K. Yörük, 2022. "Health insurance and the boomerang generation: Did the 2010 ACA dependent care provision affect geographic mobility and living arrangements among young adults?," Contemporary Economic Policy, Western Economic Association International, vol. 40(2), pages 243-262, April.
    2. Brown, James R. & Cookson, J. Anthony & Heimer, Rawley Z., 2019. "Growing up without finance," Journal of Financial Economics, Elsevier, vol. 134(3), pages 591-616.
    3. Cristina Barceló & Ernesto Villanueva, 2018. "The risk of job loss, household formation and housing demand: evidence from differences in severance payments," Working Papers 1849, Banco de España.
    4. Lisa Dettling, 2016. "Effects of entering adulthood during a recession," IZA World of Labor, Institute of Labor Economics (IZA), pages 242-242, April.
    5. Goodman, Sarena & Isen, Adam & Yannelis, Constantine, 2021. "A day late and a dollar short: Liquidity and household formation among student borrowers," Journal of Financial Economics, Elsevier, vol. 142(3), pages 1301-1323.
    6. Cooper, Daniel & Luengo-Prado, María José, 2018. "Household formation over time: Evidence from two cohorts of young adults," Journal of Housing Economics, Elsevier, vol. 41(C), pages 106-123.
    7. Heineck, Guido & Süssmuth, Bernd, 2013. "A different look at Lenin’s legacy: Social capital and risk taking in the Two Germanies," Journal of Comparative Economics, Elsevier, vol. 41(3), pages 789-803.
    8. Insoo Cho & Peter F. Orazem, 2021. "How endogenous risk preferences and sample selection affect analysis of firm survival," Small Business Economics, Springer, vol. 56(4), pages 1309-1332, April.
    9. John Y. Campbell, 2016. "Restoring Rational Choice: The Challenge of Consumer Financial Regulation," American Economic Review, American Economic Association, vol. 106(5), pages 1-30, May.
    10. Cardak, Buly A. & Martin, Vance L., 2023. "Household willingness to take financial risk: Stockmarket movements and life‐cycle effects," Journal of Banking & Finance, Elsevier, vol. 149(C).
    11. Goldfayn-Frank, Olga & Wohlfart, Johannes, 2018. "How do consumers adapt to a new environment in their economic forecasting? Evidence from the German reunification," IMFS Working Paper Series 129, Goethe University Frankfurt, Institute for Monetary and Financial Stability (IMFS).
    12. Borisova, Ekaterina & Gründler, Klaus & Hackenberger, Armin & Harter, Anina & Potrafke, Niklas & Schoors, Koen, 2023. "Crisis experience and the deep roots of COVID-19 vaccination preferences," European Economic Review, Elsevier, vol. 160(C).
    13. Eleanor Jawon Choi & Jaewoo Choi & Hyelim Son, 2019. "The Long-Term Effects of Labor Market Entry in a Recession: Evidence from the Asian Financial Crisis," Upjohn Working Papers 19-312, W.E. Upjohn Institute for Employment Research.
    14. Gunratan Lonare & Gene Lai & Sangyong Han & Chia‐Ling Ho, 2024. "CEO past distress experience and risk‐taking: Evidence from US property–liability insurance firms," Risk Management and Insurance Review, American Risk and Insurance Association, vol. 27(1), pages 5-39, April.
    15. Goytom Abraha Kahsay & Daniel Osberghaus, 2018. "Storm Damage and Risk Preferences: Panel Evidence from Germany," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 71(1), pages 301-318, September.
    16. Adamopoulou, Effrosyni & Olivieri, Elisabetta & Triviza, Eleftheria, 2024. "Eating habits, food consumption, and health: The role of early life experiences," European Economic Review, Elsevier, vol. 166(C).
    17. Mattauch, Linus & Hepburn, Cameron & Stern, Nicholas, 2018. "Pigou pushes preferences: decarbonisation and endogenous values," INET Oxford Working Papers 2018-16, Institute for New Economic Thinking at the Oxford Martin School, University of Oxford.
    18. Ulrike Malmendier & Alexandra Steiny Wellsjo, 2024. "Rent or Buy? Inflation Experiences and Homeownership within and across Countries," Journal of Finance, American Finance Association, vol. 79(3), pages 1977-2023, June.
    19. Mohrschladt, Hannes, 2021. "The ordering of historical returns and the cross-section of subsequent returns," Journal of Banking & Finance, Elsevier, vol. 125(C).
    20. Deng, Xin & Xu, Dingde & Zeng, Miao & Qi, Yanbin, 2019. "Does early-life famine experience impact rural land transfer? Evidence from China," Land Use Policy, Elsevier, vol. 81(C), pages 58-67.

    More about this item

    Keywords

    2008 financial crisis; homeownership;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:fip:fedcec:88202. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: 4D Library (email available below). General contact details of provider: https://edirc.repec.org/data/frbclus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.