House Prices and the Decision to Save for Down Payments

Research output: Contribution to journalArticle

69 Scopus citations

Abstract

This paper examines the responsiveness of renters′ decisions to save for home purchase to house prices. I use membership in a tax-deferred savings program for prospective first-time home buyers in Canada to identify renter households who are saving for a down payment. I find that high house prices substantially reduce the probability of households saving for a down payment: a $4000 increase in house prices decreases the probability of saving for a down payment by one percentage point. In addition, households saving for home purchase have $300 less in accumulated assets for every $1000 higher increment to house prices.

Original languageEnglish (US)
Pages (from-to)209-237
Number of pages29
JournalJournal of Urban Economics
Volume36
Issue number2
DOIs
StatePublished - Jan 1 1994
Externally publishedYes

ASJC Scopus subject areas

  • Economics and Econometrics
  • Urban Studies

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