At the 2026 International Housing Finance Conference

Homeowning youth 19.2% less likely to marry than non-owners

Monthly living costs for elderly single-person households drop from 1.22 million won to 796,000 won

Experts call for larger units in multi-child special supply, higher reverse mortgage enrollment

Japan cuts mortgage rates by 0.25 percentage point per child

Created using Gemini
Created using Gemini

"Young people delay marriage to buy a home, and the elderly cut back on living expenses with nothing left but a house."

That was the diagnosis offered Friday at the 2026 International Housing Finance Conference, held at the Korea Federation of Banks building in Jung-gu, Seoul. Housing finance experts from South Korea and Japan said the role of housing finance must be redefined — shifting from "finance that helps people buy homes" to "finance that manages risk at life's turning points."

The conference, co-hosted by the Korea Housing Finance Corporation (HF) and Japan's Japan Housing Finance Agency (JHF) under the theme "Demographic Change and the Future of Housing Finance," was opened by HF President Kim Kyung-hwan and JHF Executive Director Manabu Takahashi. Financial Services Commission Financial Policy Bureau Director Jeon Yo-seop and Japanese Embassy Economic Minister Kazuyoshi Onishi delivered congratulatory remarks. The two institutions also signed a memorandum of cooperation that day.

Cho Man, a professor at Sogang University and the KDI School of Public Policy and Management, delivered the keynote address, warning of a demographic reversal between South Korea and Japan and stressing the growing importance of Korea's reverse mortgage program. "In 2024, the total fertility rate was 1.15 in Japan and 0.75 in South Korea — Korea's decline has been far steeper," he said. "The share of the population aged 65 and older, as well as those 75 and older, is projected to surpass Japan's in Korea by 2045." He added that "given Korea's low pension benefits, the importance of the reverse mortgage program becomes even greater."

'Buying a home cuts marriage odds by 19%' — housing costs stall family formation

An analysis by the Korea Research Institute for Human Settlements that quantified the impact of young people's housing choices on marriage and childbirth also drew attention. Park Jin-baek, an associate research fellow at the institute, applied survival analysis to microdata from the 2022 Seoul Residential Survey and found that youth who owned their homes were 19.2% less likely to marry than those who did not. Among those aged 35 and under, the gap widened to 26.2%. By contrast, renters were 23.7% more likely to marry and did so roughly two years earlier than homeowners.

"The more young people's housing choices are tied to the condition of 'buying a home first,' the later marriage is delayed," Park said. "Housing costs determine the timing of family formation." When capital is locked up in a home purchase, marriage itself gets pushed back.

Differences by rental type were even more pronounced. Among those aged 30 and under, residents of public rental housing were 2.69 times more likely to marry. For childbirth, public rental residents were 3.36 times more likely to have a child — and 4.33 times more likely to have a third child or more — while private rental residents showed a rate of just 0.68 times, actually lower than average, with the gap widening as the number of children increased. Living in public rental housing larger than the average unit size of 61.6 square meters raised the likelihood of having a second child by 5.2 times and a third child or more by 5.87 times. On that basis, Park proposed that housing support for young families should be delivered through public rental housing rather than expanded lending for more expensive homes, and recommended raising the unit-size threshold for the multi-child special supply from 85 square meters to 102 square meters.

A string of figures illustrated the reality facing young people. Bang Hee, a senior research fellow at HF, said 86.9% of newlywed couples married less than five years ago carry debt, while only 42.7% own their home. The homeownership rate among young households stands at just 12.2%. "Over the past 35 years, the average age at first marriage has risen, making household formation increasingly dependent on debt and dual incomes," Bang said. "Rather than simply expanding credit supply, the priority should be repayment resilience and protection against income shocks."

Park Seong-uk, a senior research fellow at the Korea Institute of Finance, said only 7.3% of all apartments in Seoul are affordable for a median-income household, and that 61.7% of young household heads living independently for the first time rely on parents or relatives for housing funds. "Youth policies must be designed so they do not inadvertently deepen inequality within the younger generation," he said.

Korea Housing Finance Corporation President Kim Kyung-hwan delivers opening remarks at the 2026 International Housing Finance Conference on Friday. [Korea Housing Finance Corporation]
Korea Housing Finance Corporation President Kim Kyung-hwan delivers opening remarks at the 2026 International Housing Finance Conference on Friday. [Korea Housing Finance Corporation]

Elderly have homes but no cash — reverse mortgage enrollment stuck at 2%

Older Koreans face the opposite problem. While economic life-cycle theory predicts that people downsize their homes in old age to fund living expenses, Korean elderly households do not follow that pattern. According to the Korea Research Institute for Human Settlements analysis, the living space of single-person elderly households actually grows — from 54.6 square meters for those in their 60s to 63.9 square meters for those aged 80 and older — and the homeownership rate rises from 46.9% to 65.4%. Meanwhile, financial assets shrink from 45 million won ($33,100) to 26.48 million won, and monthly living expenses drop sharply from 1.22 million won to 796,000 won. When hit by an income shock, only 12.4% of elderly households opt to downsize or move to rental housing, while 56.8% choose to cut consumption instead.

"They have assets but cannot use them, so their standard of living declines in old age," Park said. "The reverse mortgage program — the key instrument for converting housing assets into liquidity — has stagnated at around 2% of eligible households, or about 150,000 households, and is in effect barely functioning." Professor Cho also noted that 80.7% of assets held by retirement-age households in Korea are tied up in real estate, including their primary residence, compared with 24.7% in the United States, and identified expanding the reverse mortgage program as the top priority for government-sponsored programs.

Hwang In-do, head of the monetary and financial research division at the Bank of Korea's Economic Research Institute, presented figures on the macroeconomic impact of expanding the reverse mortgage program. A Bank of Korea issue note found that 35.3% of homeowners aged 55 to 79 said they intended to enroll under the current system, a share that would rise to 41.4% if improvements were made — including targeted outreach, simplified inheritance procedures, and linking payout amounts to changes in home prices. In an optimistic scenario where all households with enrollment intent actually join, GDP was estimated to grow by 0.5 to 0.7 percentage points and the elderly poverty rate to fall by 3 to 5 percentage points, lifting at least 340,000 households out of poverty.

Hwang welcomed this year's improvements to the reverse mortgage program — a 3.1% average increase in monthly payouts, a reduction in the upfront guarantee fee from 1.5% to 1.0%, and the launch of an intergenerational reverse mortgage allowing children to inherit the program after a parent's death — but proposed two additional changes. He called for allowing enrollees to choose a home-price-linked payout structure under which monthly payments rise when property values increase, and for extending the deadline for children to repay accumulated reverse mortgage balances when inheriting a home without selling it from the current six months to two years. However, Hwang cautioned that "excessive jeonse deposit guarantees and first-time homebuyer loan support can push up jeonse prices and home prices," and said housing support should follow principles of selectivity and customization.

Japan's experiment as an early-aging society — mortgage rates cut 0.25 percentage point per child

Japan's presentation offered a preview of what South Korea will soon face. According to Tadayori Nakao, director of the Housing Bureau at Japan's Ministry of Land, Infrastructure, Transport and Tourism, the number of vacant homes in Japan has grown roughly 1.4 times over the past 20 years to about 9 million units, a vacancy rate of 13.8%. Vacant homes with no intended use — neither for rent nor for sale — grew 1.8 times over the same period to about 3.85 million units.

Japan has directly linked its response to falling birthrates to housing finance. The JHF's long-term fixed-rate mortgage product, Flat 35, cuts the interest rate by 0.25 percentage point per child for the first five years for households with children under 18 or where at least one spouse is under 40. With three children, the reduction reaches 0.75 percentage point, and combined with other qualifying conditions such as energy-efficient housing, the total reduction can reach up to 1 percentage point.

For older borrowers, the JHF has attached insurance to two products to encourage private banks to offer them: Reverse 60, a reverse-mortgage-style loan requiring only interest payments until death, and a residual-value mortgage that lowers monthly repayments by using the home's remaining value as collateral.

A panel discussion chaired by Kim Young-do, a senior research fellow at the Korea Institute of Finance, also drew participants from Asian housing finance institutions including Malaysia's Cagamas and the Philippines' National Home Mortgage Finance Corporation, who shared their countries' experiences. Professor Cho said government-sponsored programs in housing finance "should provide services to segments that the private sector cannot adequately serve and continuously expand financial inclusion for marginal borrowers," adding that "sharing international best practices among institutions like HF and JHF will enhance the capacity of each country's housing finance system to improve social welfare."


won@heraldcorp.com