This paper incorporates independent living, tenure choice and housing demand decisions of young adults using a 2011 survey on people aged 20 to 40 years in Shanghai.Our approach uses a bivariate probit model with sample selection in the first stage and applies Heckman correction in housing demand analysis.We find that the three decisions are jointly determined.Down payment constraint has significantly negative impact on tenure choice and it may not be lessened with a maximum loan-payment to income ratio of 50% ,while lender constraint may be removed with a higher down payment ratio.For that reason, income borrowing constraints are not statistically significant.When we compare separate and joint estimations of independent living and tenure choice, the significance and magnitude of permanent income and age on tenure choice has been underestimated while the effects of other variables have been overestimated in separate estimations.Further, neglecting the joint determination of tenure choice and independent living would overestimate the direct impact of permanent and temporary income on housing demand, and underestimate the indirect impact of income on housing demand via tenure choice and effects of demographic variables.