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research article
To Buy or Not to Buy: Consumer Constraints in the Housing Market
May 2016
We use a strategic household survey to study the sensitivity of intended homeownership decisions to financing constraints. We find that the average stated likelihood of buying a home is strongly sensitive to the size of the required down payment, which we vary exogenously across three scenarios. This sensitivity is particularly high for respondents that appear more liquidity constrained based on observable characteristics (including current renters, or owners with low savings or low home equity). For renters, expectations of future rent inflation and of improvements to their personal financial situation also predict intention to buy.
Type
research article
Authors
Publication date
2016-05
Published in
Volume
106
Issue
5
Start page
636
End page
640
Peer reviewed
REVIEWED
EPFL units
Available on Infoscience
December 7, 2021
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