<p><p>We develop and test a model on the effects of spatial housing price risk on housing choice. Housing price risk can be substantial but, unlike other risky assets which people can avoid, most people want to eventually own their home thereby creating an insurance demand for housing ownership early in life. With increasing demographic needs over the life cycle, our model predicts that people living in places with higher housing price risk should own their first home at a younger age, should live in larger homes, and should be less likely to refinance. These predictions are shown to hold using comparable panel data from the United States and United Kingdom.</p></p>
Authors
![James Banks](/sites/default/files/styles/square_desktop/public/2022-06/James_Banks.jpg?itok=EvmV7fKj)
CPP Co-Director
James is Senior Research Fellow and Professor of Economics at Manchester, working on broad issues in the economics of retirement, savings and health.
![Richard Blundell](/sites/default/files/styles/square_desktop/public/2024-03/Richard%20Blundell%20Head.jpg?itok=ow7e9OkA)
CPP Co-Director
Richard is Co-Director of the Centre for the Microeconomic Analysis of Public Policy (CPP) and Senior Research Fellow at IFS.
![Person graphic](/sites/default/files/styles/square_desktop/public/2022-06/IFS-person-graphic.png?itok=hWCtTSrz)
Head of Data Services
Zoe is Head of Data Services. She joined the IFS in 1998 as a researcher and moved into Data Services in 2011.
![James Smith](/sites/default/files/styles/square_desktop/public/2022-07/James%20Smith.png?itok=nG_MD7mS)
James Smith
Report details
- Publisher
- University College London
Suggested citation
Banks, J et al. (2005). House price volatility and housing ownership over the lifecycle. London: University College London. Available at: https://ifs.org.uk/publications/house-price-volatility-and-housing-ownership-over-lifecycle (accessed: 30 June 2024).
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