Home Price Appreciation in Low- and Moderate-Income Markets

Karl Case, Maryna Marynchenko

At the turn of the millennium, fully two-thirds of American households were owner-occupants. In addition, through the middle of the year in 2000, real home prices were rising in all but a handful of major metropolitan areas in the United States. In such a climate, the benefits of homeownership seem obvious. Owners whose property appreciates accumulate wealth, and most are protected from rising out-of-pocket housing costs by fixed or slowly adjusting mortgage rates. Renter households, on the other hand, are hurt by rising real rents, and they see the dream of homeownership becoming ever more elusive…