Leverage and Elderly Homeowners’ Decisions to Downsize
Year: 2015
Type: article
Study design: Observational Study
Abstract: We study the effect of financial leverage, measured using the loan-to-value (LTV) ratios, on elderly homeowners’ decisions to downsize. Using a 1999–2011 sample of elderly homeowners from the Panel Study of Income Dynamics, we find that a higher LTV ratio increases the propensity to downsize. Elderly homeowners with higher LTV ratios are more likely to move into properties with fewer rooms, to move from single-family properties into multifamily properties, and to move into less expensive homes. Our point estimates suggest that on average, a 10 per cent increase in the LTV ratio is associated with a 7.7–9.7 per cent increase in the probability to downsize.
Source: Housing Studies
Author: Xun Bian
Institution: Longwood University
Language: English
Topic: Housing Market and Economics
Subfield: Economics and Econometrics
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W1967239648