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.