In this paper, we examine the effects of housing purchase plan on wealth accumulation of Korean renters. Our emphasis is on the impacts of future homeownership probability and length of time for transition to homeowning as well as of housing price on current wealth accumulation. Based on an intertemporal utility maximization model, we theoretically analyzed factors to affect wealth accumulation and using KLIPS panel data from 2001 to 2007, we empirically estimated a structural equation for wealth accumulation.Estimation results show that future homeownership probability is positively affected by permanent income and negatively affected by current housing price. Also, length of time for transition to homeowning is shorter for higher income households and it is longer as housing price is higher.It is found that renter households accumulate more wealth as their future homeownership probability increases and as they expect homeownership in the nearer future. House price has a positive impact on wealth accumulation meaning that the higher the housing price is, renter households are likely to accumulate more wealth to satisfy downpayment constraint to purchase home.
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