The influence of household formation on homeownership rates across time and race

Type Journal Article - Real Estate Economics
Title The influence of household formation on homeownership rates across time and race
Author(s)
Volume 35
Issue 4
Publication (Day/Month/Year) 2007
Page numbers 411-450
URL http://www.econ.ohio-state.edu/haurin/wp/The Influence of Household Formation on Homeownership Rates​Across Space and Time.pdf
Abstract
Homeownership rates equal the number of households that own homes divided by the number of
households in the population. Differences in the propensity to form a household, therefore, may
contribute to changes in homeownership rates over time in addition to longstanding racial gaps in
homeownership. We examine these issues on an age-specific basis using data from the 1970 to 2000
public use micro samples (PUMS) of the decennial census.
Results indicate that lower headship rates tend to reduce homeownership rates. This pattern is most
notable for individuals in their early and mid-20s. For these individuals, declining headship rates between
1970 and 2000 reduced homeownership rates by 3 to 5 percentage points. Moreover, year-2000 African
American headship rates narrow white-black gaps in homeownership by roughly three percentage points,
while year-2000 Hispanic headship rates widen white-Hispanic gaps in homeownership by two to three
percentage points. Thus, controlling for differences in headship behavior, white-black homeownership
gaps are somewhat more severe than previously recognized, but the reverse is true for white-Hispanic
gaps.

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