An article from The Wall Street Journal highlights a new study by the Federal Reserve Bank of Boston, and the effects of homeownership on the future income of homeowners’ children.
The study, recently published in the Journal of Urban Economics, found that when households included a 17-year-old, a 1% rise in prices that year resulted in about 0.9% higher annual income for the child later in life – if the parents owned the home.
The Wall Street Journal spoke with Daniel Cooper and Maria Jose Luengo-Prado, both senior economists at the Federal Reserve Bank of Boston, about their report.
“If home prices are rising, parents who are homeowners may have additional resources to finance a child’s higher education, either because they feel richer or they can borrow against the home’s equity,” said Dr. Luengo-Prado. “This may allow their children to attend college or attend a higher-ranked [more expensive] school.”
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