DO BORROWING CONSTRAINTS CHANGE US HOMEOWNERSHIP RATES

This study has two main objectives. First, Lye estimate various altern ative specifications of the tenure choice model with borrowing constra int variables, originally put forth by Linneman and Wachter, using a m ore recent sample of the Survey of Consumer Finance. Second, we simula te effects of policy changes governing constraints and changes in mort gage interest rates, both on households' owning decisions and on the a ggregate homeownership rate. While the impact of constraints has been demonstrated in previous studies, our research provides the first micr osimulation estimates of the impact for aggregate homeownership rates for the entire U.S. population. (C) 1997 Academic Press.