Borrowing Constraints and Tenure Choice in Female-Led Households

Abstract

This study demonstrates the impact of loan constraints such as LTV and DTI on the home ownership of female-led households. For the study, data from the 2018 Housing Survey were used to classify female-led households, male-led households, and single-parent households raising children under 19 years of age. First, it was analyzed that in the case of female-led households, the gap between rental and owner-to-owner net assets is much larger than that of male-led households. Second, loan constraints are a factor that hinders home ownership of female-led households, and compared to married households, the probability of home ownership by female households and single-parent households is significantly lower. Third, female single-parent households are most affected by loan regulations in choosing their own ownership compared to other households. These results mean that loan regulations such as LTV and DTI have a significant impact on the decision of self-ownership of female-led households. If the purpose of the policy is to increase the self-occupation of female-led households, policy combinations such as increasing the ratio of mortgage loans and lowering interest rates to help them feel less interest burden on loans will be needed.