Are Couples Staying Together for the House?

July 18, 2011

A new study by the American Economic Review (AER) identifies a correlation between lower divorce rates and home price declines. According to Census data, the divorce rate fell to 46 percent in 2009 from 50 percent in 1996.

Essentially, AER says couples are more likely to divorce when equity gains make it possible for them to put money down on separate homes. But a decrease in residential values and the high cost of divorce proceedings have prompted some couples to stay together.

AER says these findings should be taken into consideration as lawmakers push changes in housing policy. "Given the high level of current interest in policy to shore up housing markets, it is worth better understanding the broader consequences of such policy," the report concluded.

Source: “Divorce Rates Decline Alongside Home Prices,” Realty Times, Carla Hill (July 15, 2011)