Homeownership Gains During the 1990s: Composition
Effects and Rate Effects (January 2005, 83 p.)
Homeownership rates are like income – both the level
and the distribution matter.
Inequalities persist in homeownership rates. The rate for
Non-Hispanic Whites exceeds the rates for non-Hispanic Blacks,
Hispanics, and non-Hispanic Other, by 15 to 30 percentage
points. The likelihood of being a homeowner increases directly
with income so that very high income households are 10 to
45 percentage points more likely to be homeowners than households
in other income classes. Central city households have a homeownership
rate that lags behind households living outside central cities
by more than 20 percentage points.
Out of concern about these “gaps”, the Department
of Housing and Urban Development (HUD) has sponsored a series
of research studies. This paper is one of these studies; its
goal is to determine whether the progress made during the
1990’s represents a real improvement in homeownership
rates or is only the manifestation of expected demographic
trends. The policy reason for looking at the effects of demographics
on the national homeownership rate is to determine whether
the prospects of a household in 2000 for becoming a homeowner
are better than those of a similarly defined household in
1990.
Using data from the 1990 and 2000 decennial censuses, the
paper distinguishes between changes in homeownership rates
that result from changes in the composition of the population
from changes that result from improved homeownership opportunities.
The analysis concludes that the growth in the national homeownership
rate between 1990 and 2000 was predominately due to widespread
increases in homeownership rates throughout the various components
of the population. In general, the prospects of a household
in 2000 for becoming a homeowner were better than those of
a similarly defined household in 1990.
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