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Author: Rosenthal, Stuart S.
Resulting in 2 citations.
1. Haurin, Donald R.
Munasib, Abdul
Rosenthal, Stuart S.
Terminations of First-Time Homeownership
Economics Working Paper Series OKSWP0702, Department of Economics, Oklahoma State University, 2007.
Also: http://spears.okstate.edu/ecls-working-papers/files/0702_Munasib_SustianFHO.pdf
Cohort(s): NLSY79
Publisher: Department of Economics, Oklahoma State University
Keyword(s): Home Ownership; Racial Differences; Wealth

Permission to reprint the abstract has not been received from the publisher.

The cliché “once a homeowner, always a homeowner” is not true. We study the causes of terminations of spells of first-time homeownership. Using a national panel data set, we find that the likelihood of a household terminating a spell of homeownership is predictable at the time of purchase. Specifically, the lower the probability score that a household becomes an owner at the time of purchase, the greater the likelihood of termination of the subsequent ownership spell. This finding suggests that post-purchase counseling programs can be targeted toward those most at risk at the time of home purchase. We also find that postpurchase events affect the likelihood of termination. Important factors include changes in household earnings and wealth, house value, unemployment rates, family size, and marital status. There are substantial racial differences in termination rates. Some of these differences are explained by differences in household characteristics at the time of home purchase, and some by differences in post-purchase events or households’ reactions to them.
Bibliography Citation
Haurin, Donald R., Abdul Munasib and Stuart S. Rosenthal. "Terminations of First-Time Homeownership." Economics Working Paper Series OKSWP0702, Department of Economics, Oklahoma State University, 2007.
2. Haurin, Donald R.
Rosenthal, Stuart S.
The Sustainability of Homeownership: Factors Affecting the Duration of Homeownership and Rental Spells
Contract C-OPC-21895 - Task Order No. 4, U.S. Department of Housing and Urban Development, Office of Policy Development and Research, Washington, DC, December 2004.
Also: http://www.huduser.org/Publications/pdf/homeownsustainability.pdf
Cohort(s): NLSY79
Publisher: U.S. Department of Housing and Urban Development
Keyword(s): Home Ownership; Racial Differences; Residence

Permission to reprint the abstract has not been received from the publisher.

This study uses a national data set (the National Longitudinal Survey of Youth-NLSY) that follows a cohort of individuals for 21 years. Their residence histories are tracked, measuring the time spent in each type of tenure. This data set provides extensive information about the socio-demographic characteristics of individuals, allowing one to study the determinants of the length of an ownership spell, or a rental spell. The data are weighted to make the sample nationally representative.

The analysis begins by distinguishing between the length of stay in a particular dwelling and the duration of stay in one or more owned homes. All existing published studies focus on the length of stay in a dwelling (either owner or rented), or on the time to mortgage default. These studies focus on the time spent in a particular dwelling unit, not the length of time in a particular “state of the world” such as owning or renting. While these studies are of interest for some questions, they do not provide the needed information to determine whether different lengths of continuous spells of owning or renting contribute to racial gaps in homeownership rates.

A simple example confirms that the lengths of time spent as a renter and owner affect the overall ownership rate. Assume that African Americans and whites have the same residence history over a 40 year period, consisting of four spells: first the individual rents, then owns, then rents, then owns. If African Americans spend 9 years in each rental spell and 11 years in each ownership spell, then their average homeownership rate will be 0.45. If whites spend 6 years in each rental spell and 14 in each ownership spell, then their average homeownership rate will be 0.70. In this case, the sole cause of the 25 percentage point gap in ownership rates is the difference in the durations of spells of owning and renting.

The study of duration of renting and owning should lead to important policy implications. Policies that promote only temporary spells of homeownership have little impact on the national homeownership rate. What is important is promoting new ownership spells that are sustainable. Policies that lengthen existing ownership spells also will raise the national ownership rate, even if the rate of attaining first-time or subsequent spells of ownership is not affected.

Bibliography Citation
Haurin, Donald R. and Stuart S. Rosenthal. "The Sustainability of Homeownership: Factors Affecting the Duration of Homeownership and Rental Spells." Contract C-OPC-21895 - Task Order No. 4, U.S. Department of Housing and Urban Development, Office of Policy Development and Research, Washington, DC, December 2004.