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The Changing Prospects for Building Home Equity: An Updated Analysis of Rents and the Price of Housing in 100 Metropolitan Areas

Author

Listed:
  • Hye Jin Rho
  • Danilo Pelletiere
  • Dean Baker

Abstract

This report updates CEPR's May 2008 report titled "Ownership, Rental Costs and the Prospects of Building Home Equity: An Analysis of 100 Metropolitan Areas," which compared the ownership and rental costs in 100 major U.S. metropolitan areas and projected the potential for a first-time homebuyer in those cities to accumulate home equity. Since the publication of that paper, housing prices have continued their steep descent in much of the country and rents have risen modestly. The study shows that recent price declines indicate many communities are moving back toward the historical track of modest equity increases for homebuyers. The findings point out that is still unwise for policy makers to attempt to directly intervene in housing markets to maintain what are historically unprecedented high home prices.

Suggested Citation

  • Hye Jin Rho & Danilo Pelletiere & Dean Baker, 2008. "The Changing Prospects for Building Home Equity: An Updated Analysis of Rents and the Price of Housing in 100 Metropolitan Areas," CEPR Reports and Issue Briefs 2008-26, Center for Economic and Policy Research (CEPR).
    • Handle: RePEc:epo:papers:2008-26
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    File URL: http://www.cepr.net/documents/publications/Changing_Prospects_for_Building_Home_Equity_2008_10.pdf
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    References listed on IDEAS

    as
    1. Eileen Appelbaum & Dean Baker & John Schmitt, 2008. "A Slow-Motion Recession: What Congress Can Do to Help," Challenge, Taylor & Francis Journals, vol. 51(5), pages 5-19.
    2. Dean Baker & John Schmitt, 2008. "What We’re In For: Projected Economic Impact of the Next Recession," CEPR Reports and Issue Briefs 2008-03, Center for Economic and Policy Research (CEPR).
    3. John Schmitt & Hye Jin Rho, 2008. "The Reagan Question: Are You Better Off Now Than You Were Eight Years Ago?," CEPR Reports and Issue Briefs 2008-27, Center for Economic and Policy Research (CEPR).
    4. John Schmitt & Dean Baker, 2008. "What We're In For:," Challenge, Taylor & Francis Journals, vol. 51(3), pages 27-42.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    JEL classification:

    • G - Financial Economics
    • G2 - Financial Economics - - Financial Institutions and Services
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • R - Urban, Rural, Regional, Real Estate, and Transportation Economics
    • R2 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis
    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand
    • R28 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Government Policy

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