Homebuyers, Owners, & Renters
      
      Homebuyers, Owners, and Renters

          
                        Business Partners
                  Single-Family Business

Helping lenders serve homebuyers and homeowners with affordable mortgages
    
          Multifamily Business

Financing for quality, affordable rental housing in every market, every day
    
          Capital Markets

Reducing risk and enhancing housing finance liquidity
          About Us
                toggle
                Who We Are
                                              toggle
                        Awards and Recognition
                                                      Diversity and Inclusion
                                                              toggle
                                Employee Resource Groups
                                                                      Progress With Purpose
                                                      Employee Code of Conduct
                                                      Community Engagement
                                                      History
                                      What We Do
                                              toggle
                        Duty to Serve
                                                              toggle
                                Manufactured Housing
                                                                      Affordable Housing Preservation
                                                                      Rural Housing
                                                                      Research Initiatives
                                                                      Colonias Investment Areas
                                                      Homeownership
                                                              toggle
                                Access to Mortgage Credit
                                                                      Restrictive Covenants
                                                      Innovation
                                                      Mortgage Finance in America
                                                      Financial Performance
                                                      Disaster Resiliency and Relief
                                                      Pilot Transparency
                                      Leadership Team
                                      Corporate Governance
                                              toggle
                        Corporate Governance Guidelines
                                                      Fannie Mae Charter
                                                      Board of Directors
                                                      Committees
                                                      Committee Charters
                                                      Code of Conduct
                                                      Bylaws
                                                      Contacting the Board of Directors
                                                      Housing Reports
                                      Investor Relations
                                              toggle
                        Quarterly and Annual Results
                                                      Annual Reports
                                                      SEC Filings
                                                              toggle
                                All SEC Filings
                                                                      Annual Filings
                                                                      Quarterly Filings
                                                                      Current Reports
                                                                      Section 16 Filings
                                                                      Proxy Filings
                                                      Additional Disclosures
                                                              toggle
                                Monthly Summary
                                                                      Capital Disclosures
                                                      Stock Information
                                                      Current Stock Information
                                                      Contact Information
                                      ESG
                                              toggle
                        Learn about our business
                                                      Environmental
                                                      Social
                                                              toggle
                                Equitable Housing Finance Plan
                                                      Governance
                                                      Sustainable Bonds
                                                              toggle
                                Green Bonds
                                                                      Social Bonds
                                                      Reports & Disclosures
                                                              toggle
                                2021 ESG Report
                                      Research & Insights
                                              toggle
                        Forecast
                                                              toggle
                                Monthly Archive
                                                                      Weekly Archive
                                                      Surveys & Indices
                                                              toggle
                                National Housing Survey
                                                                      Mortgage Lender Sentiment Survey
                                                                      Fannie Mae Home Price Index
                                                                      Refinance Application-Level Index
                                                                      Special Topics
                                                      Publications
                                                              toggle
                                Fannie Mae Working Papers
                                                                      Housing Insights
                                                                      Partner Research
                                                                      Publications Archive
                                                      Perspectives
                                                              toggle
                                Archive - 2020
                                                                      Archive - 2021
                                                                      Archive - 2022
                                                                      Archive - 2023
                                      Newsroom
                                              toggle
                        News
                                                      Media Resources
          
                        Careers
                toggle
                Our Teams
                                              toggle
                        Corporate Teams
                                                      Data & Analytics
                                                      Digital & Technology
                                                      Mortgage & Customer Solutions
                                                      Risk Management
                                      Life at Fannie Mae
                                      Diversity & Inclusion
                                      Benefits & Professional Development
                                      Campus
          
                        Contact Us
                      
            Google Translate Disclaimer
            The Google Translate feature is a third-party service that is available for informational purposes only. Fannie Mae is unable to guarantee the accuracy of any translation resulting from the tool and is not responsible for any event or damage that occurs as a result of using the translations generated by the Google Translate feature.
            OK
  Translate
        Translation Disclaimer
          Chinese, Traditional
            English
            Filipino
            Korean
            Spanish
            Vietnamese
 FM Site Nav
  

        

Homepage
                    
      Fannie Mae logo
    Toggle navigation
      Rent
                
                All Renter Resources
                                      The Rental Process
                                      Make Your Rent Count
                                      Credit Basics
                      
            Buy
                
                All Homebuyer Resources
                                      7 Steps to Homeownership
                                      HomeView Homeownership Education Course
                      
            Own
                
                All Homeowner Resources
                                      Make the Most of Your Home
                                      Refinancing Your Mortgage
                                      When It’s Time to Sell
                      
            Get Relief
                  Manage Financial Uncertainty

All Resources to Manage Financial Uncertainty

Help for Homeowners

Help for Renters

Protect Yourself from Fraud
    
          Recover from a Disaster

All Resources for Recovering from a Disaster

Recovery Assistance for Homeowners

Recovery Assistance for Renters

Protect Yourself from Fraud
                      
            Calculators & Tools
                
                All Calculators & Tools
                                      Tools for Renters
                                      Tools for Homebuyers
                                      Tools for Homeowners
                                      HomeView® Homeownership Education Course
                                      Glossary
                                      Mobile AppToggle search
 Skip to main content
          
    
    Home
                        Research and Insights
                        Perspectives
                        Education and the Intergenerational Transmission of Homeownership
    Perspectives Blog
Education and the Intergenerational Transmission of Homeownership
September 14, 2016
Patrick Simmons & Gary Painter

As student loan debt has mounted and young-adult homeownership rates have fallen over the past decade, considerable attention has focused on the nexus among student loans, education, and homeownership. Recent analyses suggest that the benefits of attaining a college education outweigh the downsides of student loan debt when it comes to achieving homeownership.1

Although valuable, this recent research doesn’t fully disentangle the complex, interconnected avenues by which educational attainment and other factors shape the homeownership prospects of young adults. In particular, the intergenerational channels by which parental resources affect their children’s homeownership status have not been fully separated from the roles of their children’s education and other endowments. Parental wealth enhances children’s chances for homeownership through direct financial assistance around the time of home purchase.2 But prior to that, family economic resources might also support college attendance by the children. In turn, higher education supports higher earnings and thus provides a financial foundation for achieving homeownership. Without knowledge of parental resources, children’s educational attainment might assume an exaggerated importance in homeownership achievement.  However, if education has an effect that is independent of parental resources, it would suggest that public policies to promote higher education could have the added benefit of promoting greater homeownership attainment.

In the second of a series of studies sponsored by Fannie Mae, Dowell Myers, Gary Painter, and Julie Zissimopoulos of the University of Southern California unpack the complex relationships among adult children’s homeownership attainment, their education and other characteristics, and their parents’ resources. After controlling for child race, age, sex, and marital status in addition to parental resources, the researchers found that having a Bachelor’s or higher degree compared to not having a high school diploma increases homeownership attainment of the adult child by 17.5 percentage points. Even after introducing additional controls for the child’s current income and wealth (which is also correlated with parental resources), the researchers found that homeownership attainment remains 5.4 percentage points higher for those with at least a Bachelor’s degree.

Perhaps the most striking finding of the study is how little the education effect on homeownership is dampened when parental resources are controlled. Including parental endowments reduces the association between education and homeownership for adult children by less than 2 percentage points. This finding suggests that the educational boost to homeownership is largely independent of the parental resources that may have helped increase education.

The implication of finding this independent education effect is that homeownership attainment could be increased via policies that promote higher education and increase human capital. While it is not completely understood why higher education is associated with higher homeownership, candidate reasons include, foremost, the higher earnings and greater wealth that flow from greater human capital. Yet, evidence of an education effect that persists net of household income and wealth suggests that additional mechanisms are at work. For example, higher education might entail greater financial fluency, including better understanding of the steps necessary to buy a house and access credit markets.

Higher education is subject to policy stimulation, and policies to increase attainment of a college degree have well-known benefits in the labor market and for wealth accumulation by households. This new research suggests that yet another benefit of providing broader access to higher education is improving access to homeownership.

**Gary Painter
Director of Social Policy
Sol Price Center for Social Innovation
University of Southern California**

**Patrick Simmons
Director, Strategic Planning
Economic & Strategic Research Group**

*September 14, 2016*

1See Susan M. Dynarski (2016), "The Dividing Line Between Haves and Have-Nots in Home Ownership: Education, Not Student Debt," The Brookings Institution, Evidence Speaks Reports (1, 17), May 3, 2016, (https://www.brookings.edu/research/reports/2016/05/03-dividing-line-between-haves-have-nots-home-ownership-education-not-student-debt-dynarski); Jamie Anderson (2015), "Yes, First-Time Buyer Demand is Weak. But Stop Blaming Student Debt," Zillow, September 16, 2015 (https://www.zillow.com/research/student-debt-homeownership-10563); and Qiang Cai and Sarah Shahdad (2016), "Student Debt: Whose Homeownership Rate Does It Hurt Most?" Fannie Mae Perspective, July 28, 2016 (https://www.fanniemae.com/portal/research-insights/perspectives/072816-cai-shahdad.html)

2 See Dowell Myers, Gary Painter, and Julie Zissimopoulos (2016), The Role of Parental Financial Assistance in the Transition to Homeownership by Young Adults, Working Paper (April), Fannie Mae, Washington, DC (https://www.fanniemae.com/portal/research-insights/perspectives/042616-simmons-myers.html). Using data from the Health and Retirement Survey, the authors found that the unconditional probability of transitioning to homeownership increased by 23.0 percent among adult children who had received a transfer of at least $5,000 for any purpose from their parents in the past two years. Even after controlling for parental wealth and other parent and child characteristics, the probability of transitioning to homeownership still increased by 13.1 percent with receipt of a transfer.

*The authors thank Dowell Myers, Julie Zissimopoulos, and the other members of the project research team for their work on this study. The authors also thank Mark Palim and Hamilton Fout for their comments on the Working Paper upon which this FM Commentary is based. Of course, all errors and omissions remain the responsibility of the authors.*

*Opinions, analyses, estimates, forecasts and other views of Fannie Mae's Economic & Strategic Research (ESR) Group included in these materials should not be construed as indicating Fannie Mae's business prospects or expected results, are based on a number of assumptions, and are subject to change without notice. How this information affects Fannie Mae will depend on many factors. Although the ESR Group bases its opinions, analyses, estimates, forecasts and other views on information it considers reliable, it does not guarantee that the information provided in these materials is accurate, current or suitable for any particular purpose. Changes in the assumptions or the information underlying these views could produce materially different results. The analyses, opinions, estimates, forecasts and other views published by the ESR Group represent the views of that group as of the date indicated and do not necessarily represent the views of Fannie Mae or its management.*

TOPICS
  
Fannie Mae Corporate
  
  
      Twitter
              Facebook
              Linkedin
              Email
Research and Insights
                                                              Forecast
                                    Surveys & Indices
                                    Publications
                                    Perspectives
                                                              Archive - 2024
                                    Archive - 2023
                                    Archive - 2022
                                    Archive - 2021

Our Company
    About Us
      Contact Us
      Careers
      Investor Relations
      Newsroom
      Research & Insights
      ESG
  Business Partners
    Single-Family Business
      Multifamily Business
      Capital Markets
	      Suppliers
      Developer Portal
  Homebuyers, Owners, & Renters
    Educational Resources
      Credit Basics
      HomeView Homeownership Education Course
      HomePath - Search for Homes
      Make Your Rent CountCalculators & Tools
      All Calculators and Tools      Glossary of Key Terms
      Mortgage Calculator
      Down Payment Assistance Search Tool
      Mobile AppLet Us Help You
      Contact a Housing Counselor
      Manage Financial Uncertainty
      Recover from a Disaster
    
    
  

      
Social media
  

        
            Follow us
          Follow us
          Facebook
          Twitter
          LinkedIn
          Instagram
    Footer
  

        
            Legal
          Privacy
          Digital Accessibility
                Cookie Preferences
            © 2024 Fannie Mae