00000nam 2200000za 4500 9.817691 CaOODSP 20221107142531 cr ||||||||||| 160513s2016 oncd ob f000 0 eng d CaOODSP eng eng fre n-cn--- FB3-5/2016-24E-PDF Ho, Anson T. Y. Housing and tax-deferred retirement accounts [electronic resource] / by Anson T.Y. Ho and Jie Zhou. [Ottawa] : Bank of Canada, 2016. iii, 46 p. Staff Working Paper, 1701-9397 ; 2016-24 "May 2016." Includes bibliographical references (p. 33-37). Assets in tax-deferred retirement accounts (TDA) and housing are two major components of household portfolios. In this paper, we develop a life-cycle model to examine the interaction between households’ use of TDA and their housing decisions. The model generates life-cycle patterns of home ownership and the composition of net worth that are broadly consistent with the data from the Survey of Consumer Finances. We find that TDA promotes home ownership, as households take advantage of the preferential tax treatments for both TDA and home ownership. They substitute TDA assets for home equity by accumulating wealth in TDA and making smaller down payments (taking out bigger mortgages); consequently, they become homeowners earlier in their lives. On the other hand, housing-related policies, such as a minimum down payment requirement and mortgage interest deductibility, affect households’ housing decisions more than their use of TDA. gccst Savings gccst Retirement gccst Housing gccst Modelling Zhou, Jie. Bank of Canada. Staff working paper (Bank of Canada) 1701-9397 ; 2016-24 (CaOODSP)9.806221 PDF 628 KB https://publications.gc.ca/collections/collection_2016/banque-bank-canada/FB3-5-2016-24-eng.pdf