From renting to owning: Life course and housing market circumstances

Abstract Moving from a rental dwelling to owner occupation is an important event in the housing career of a household. The literature shows that considerations of housing consumption, related to household circumstances, play a dominant role in the decision to rent or to buy a dwelling. The analysis in this article substantiates again that family status must have reached a certain stability, and prospects of a substantial permanent income must be good, before the move from renting to owning is considered. But general economic circumstances which manifest themselves into changes in housing market conditions, also have measurable influences on the decision for renting or owning. In the Netherlands, the propensity for renters to buy a dwelling were low between 1978 and 1982 when prices of owner occupation were falling, mortgage interest rate was high and income prospects were uncertain. Government policy certainly has an influence on the decision of households to rent or to buy a dwelling. In the long term go...

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