Determinants of Home Ownership

skills learned: linear regression, variance inflation factor, f-tests, heteroskedasticity, robustness analysis

The rising cost of living in the United States has become an increasingly pressing concern over the past years. According to data from the Federal Reserve, the median sales price for US homes has skyrocketted between 2015 and 2022 (U.S. Census Bureau). These rising prices impact both homeowners and renters alike, since escalating housing costs are also reflected in higher renting rates. Indeed, the average rent in the United States rose by 18% between 2017 and 2022 (Schaeffer, 2022). Both the higher housing prices and renting rates serve as potential roadblocks for homeownership, leading to the current US "crisis" in acquiring living quarters.

In order to determine policy-based solutions for the housing crisis, it is crucial to understand the key factors that impact housing status. For example, home ownership likely serves as a reflection of the surplus income available to a household, since it requires a downpayment and monthly mortgage contributions (Layton, 2021). Moreover, factors such as urban location and state of residence could impact house pricing. This study examines the impact of both household and individual demographic factors on the rate of home ownership, with particular emphasis on the impact of race.