TY  - JOUR
AU  - Green,Richard K.
TI  - Should the Stagnant Homeownership Rate be a Source of Concern?
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 5176
PY  - 1995
Y2  - July 1995
UR  - http://www.nber.org/papers/w5176
L1  - http://www.nber.org/papers/w5176.pdf
N1  - Author contact info:
Richard Green
Tepper School of Business
Carnegie Mellon University
Pittsburgh, PA 15213
Tel: 412/268-2302
E-Mail: rcgreen@cmu.edu
M2  - featured in NBER digest on 1995-10-01
AB  - The homeownership rate in the United States was essentially stagnant during the 1980's.  This stagnation should be a source of concern if the rate reflects stagnant economic conditions and ownership opportunities, not if it simply reflects changing demographic conditions or preferences. Using a series of affordability measures, we find that homeownership opportunities improved almost everywhere during the 1980's, suggesting that the cause of the stagnant rate was something other than economic conditions.  In fact, we find that both demographics and changes in preferences led to an increase in the proportion of households headed by single people; all else being equal, this would tend to push the owner-occupancy rate downward.  We also found that while homeownership opportunities improved during the 1980's, the ex ante use cost of owning a home increased almost everywhere, reducing the financial attractiveness of owning a home. The combination of improving affordability conditions and worsening financial appeal had an overall neutral effect on the aggregate ownership rate.
ER  -