Monday, July 11, 2011

House Prices and Economic Mobility

Rising house prices allow homeowners to invest more in their teenage children. A study by the Federal Reserve Bank of Boston examined whether children who turn 17 when house prices are rising, and whose parents are homeowners, do better than other children--such as the children of renters or children who turn 17 when house prices are flat or falling. They do. That's because their homeowner parents can--and do--use their growing home equity to help pay for college. Children who turn 17 during a time of rising house prices are more likely to graduate from college, take on less student debt, and earn more as adults.

Source: Federal Reserve Bank of Boston, House Price Growth When Kids are Teenagers: A Path to Higher Intergenerational Achievement?

No comments: