In the 1990s, the U.S. economy experienced the longest expansion in its history, marked by substantial growth in household income and wealth. In addition, Congress passed the Tax Reform Act of 1986 and the Taxpayer Relief Act of 1997, two laws favorable to homeowners. Therefore, it’s not surprising that homeownership rates and the mortgage indebtedness of American families have also changed significantly. In this article, Wenli Li uses the University of Michigan’s Panel Study of Income Dynamics to examine the effects of these changes and how they vary across households.
This article appeared in the First Quarter 2005 edition of Business Review.
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