The Influence of Household Formation on Homeownership Rates Across Time and Race

40 Pages Posted: 18 Nov 2007

See all articles by Donald R. Haurin

Donald R. Haurin

Ohio State University (OSU) - Economics

Stuart S. Rosenthal

affiliation not provided to SSRN

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 long-standing racial gaps in homeownership. We examine these issues on an age-specific basis using data from the 1970 to 2000 public use microsamples 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 three to five percentage points. Moreover, 2000 African American headship rates narrow white-black gaps in homeownership by roughly three percentage points, whereas 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.

Suggested Citation

Haurin, Donald R. and Rosenthal, Stuart S., The Influence of Household Formation on Homeownership Rates Across Time and Race. Real Estate Economics, Vol. 35, No. 4, pp. 411-450, Winter 2007. Available at SSRN: https://ssrn.com/abstract=1030891 or http://dx.doi.org/10.1111/j.1540-6229.2007.00196.x

Donald R. Haurin (Contact Author)

Ohio State University (OSU) - Economics ( email )

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Stuart S. Rosenthal

affiliation not provided to SSRN

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