Marital history and home ownership: Evidence from Australia

The relative cost of owning and renting housing and housing affordability have been clearly established as important determinants of home ownership. But the roles of marital status and history have been largely ignored. In this paper we show that both current marital status and past history affect ownership. Past history matters because wealth accumulation is greater among couple households than singles owing largely to economies of scale in housing consumption. Moreover, wealth is lost upon divorce. In effect, past marital history affects the affordability of owner housing. This result is shown in the estimation of model explaining wealth, leverage and tenure choice using Australian datasets

Mortgage Pricing: What Have We Learned So Far?†

Much progress has been achieved in the valuation of call options and mortgages. Preliminary evidence suggests that the observed term structure of interest rates (the full structure, not just the end-points) and a reasonable estimate of the volatility of spot rates is sufficient for pricing purposes. Knowledge of the precise nature of the interest-rate process and the exact market price of interest-rate risk, the not-well-identified determinants of the term structure, are not necessary for pricing. Moreover, the number of interest-rate state variables is also of little import, again holding the term structure and rate volatility constant. Copyright American Real Estate and Urban Economics Association.

Leaving the parental home in Australia over the generations: evidence from the Household, Income and Labour Dynamics in Australia (Hilda) Survey

The decision to remain in or leave the parental home represents the first housing career choice of young people. In this paper, we examine the parental home leaving outcomes for Australian birth cohorts in the twentieth century using recall questions contained in the Household, Income and Labour Dynamics in Australia Survey. The findings from survival analysis and hazard function modelling is that a continuous, gradual reduction in the age of first leaving the parental home in Australia is evident up to the 1947-51 birth cohort, followed by stability and then a rise in age of first leaving home for the most recent birth cohorts. Birth cohort effects remain significant even after other measured determinants of parental home leaving are taken into account. The paper confirms the strong roles that education, family background, and ethnicity have on parental home leaving outcomes