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Length of Spells of Homeownership Affects Homeownership Rates, Study Finds

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The nation's homeownership rate is affected not just by
patterns of homebuying, but also by the length of time
that households own and the rate at which households exit
homeownership to rent or live with parents. A study
recently published by the U.S. Department of Housing and
Urban Development analyzes these factors, casting new
light on differences in ownership rates among African
Americans, whites, and Hispanics. The full text of the
study, The Sustainability of Homeownership: Factors
Affecting the Duration of Homeownership and Rental
Spells, is available as a free download at
https://www.huduser.gov/portal/publications/affhsg/homeownsustainability.html

The study finds that duration of periods of homeownership
differs by race and ethnicity.  For white households, the
average spell of homeownership for first-time buyers is
16.1 years, compared with 9.5 years for African Americans
and 12.5 years for Hispanics. The termination rate of
homeownership periods by African-Americans is 240 percent
of that for whites, while the rate for Hispanics is 168
percent of that for whites.

The study concludes that, to have a "lasting impact on
overall homeownership rates, policies must promote
ownership spells that are sustainable. Furthermore,
policies that lengthen existing ownership spells also
will raise the national ownership rate, even if the rate
of attaining first-time or a subsequent spell of
ownership is not affected."

The study first describes homeownership and rental
spells, focusing on differences by race, ethnicity, and
income.  An econometric analysis of spell length explores
the role of factors such as education, changes in a
household's weeks worked, unemployment rates, and
mortgage interest rates. This analysis utilizes a
nationally representative data set, the National
Longitudinal Survey of Youth, which follows a cohort of
individuals for 21 years, as the basis for providing data
on housing tenure.

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