Conference Agenda

Session
Track T8-4: Return Expectations of Households and Professionals
Time:
Tuesday, 21/May/2024:
11:30am - 12:15pm

Session Chair: Alessandro Previtero, Indiana University
Discussant: Nuno Clara, Duke University
Location: Room 610


Presentations

Partial Homeownership: A Quantitative Analysis

Eirik Eylands Brandsaas1, Jens Soerli Kvaerner2

1Federal Reserve Board; 2Tilburg University

Partial Ownership (PO), which allows households to buy a fraction of a home and rent the remainder, is increasing in many countries with housing affordability challenges. We incorporate an existing for-profit PO contract into a life-cycle model to quantify its impact on homeownership, households’ welfare, and its implications for financial stability. We have the following results: 1) PO increases homeownership rates. 2) Willingness to pay increases with housing unaffordability and is highest among low-income and renting households. 3) PO increases aggregate debt as renters become partial owners but also reduces the average leverage ratios as indebted homeowners become partial owners.


Brandsaas-Partial Homeownership-1351.pdf