Wealth and Homeownership

This chapter introduces the reader to the key variables of our book: wealth and homeownership. We first briefly describe the evolution of assets and homeownership and then provide a conceptual framework within which the decision process of wealth accumulation and homeownership can be examined. This framework will be used as the conceptual background used to interpret asset accumulation decisions.

In this chapter, we discuss the importance of wealth when considering the economic well-being of households and provide an overview of current wealth levels across countries in the EU and North America. We point to the relatively large variance of wealth levels within EU countries, including the UK (at the time of writing this chapter), as well as Canada and the US. In addition, we provide some suggestions of why there may be differences in wealth accumulation between women and men. We elaborate not only on the reasons for accumulation, which may differ, but also on the different ways women and men accumulate wealth. We discuss these differences in terms of wealth trajectories. In addition, we consider differences in wealth accumulation among families with and without children.

Homeownership trends developed in 22 OECD countries over the past three to four decades are examined and differences related to the homeownership gap for women and men are discussed, with a focus on most recent trends. The US and countries with varying institutional structures are compared with particular attention being paid to differences across family types. The estimation techniques allow us to discuss the role of determinants from a gender perspective. We find that single women are better off than single men without children and a reverse trend exists in families with children. The general negative effect for women remains for younger cohorts in the face of risking homeownership. The latest crisis did not change the general long-running trend of the homeownership gap except for the US and France. The findings of this chapter provide an international perspective on differential homeownership rates among women and men, across countries and over time. Given that the value of one’s own home (home equity) is the largest financial reserve in a household’s wealth portfolio, it is important to have a better understanding of the differences resulting from gender and family types.

This chapter elaborates on the relationship between homeownership and wealth, particularly investigating whether homeowners have additional wealth, which seems to be the case. We run the empirical analysis using the Household Finance and Consumption Survey (HFCS) data for two waves and point to differences that exist among women and men. The chapter also questions the risks that an excessively illiquid portfolio might generate.