Local housing-market effects on tenure choice

The main objective of the present study is to find out which market factors affect homeownership attainment after controlling for individual human capital. The 1980 and 1990 individual Census data (PUMS) in the U.S. are used to investigate the contextual influences on choosing two types of housing: single- and multi-family housing. Trichotomous tenure choice models are applied to four representative age groups. The study takes advantage of the multi-level design, allowing relationships between individual and housing market characteristics to vary from place to place. One finding is that market variations as well as individual characteristics affect tenure choices. The authors argue that research on homeownership attainment should not only consider individual or household attributes but should be sensitive to spatiality that recognizes market effects. The conclusion is that housing research needs to be comprehensive enough to understand the complex interaction between the individual's human capital and the metropolitan housing-market characteristics.