Why Home Ownership Is Up

Some writers (and many politicians) have credited various government programs with the increase in the rate of home ownership from 64.2 percent in 1990 to 66.2 percent in 2000. However, an examination of demographic trends suggests that the rising homeownership rate is more likely attributable to our aging population. Nationwide, there was a 2.9 percentage point gain in the home ownership rates of those aged 65 and older, by far the largest of any age group. Homeownership rates for other age groups were fairly constant (even declining slightly for the 45-54 age group).

But, notice also that homeownership rates rise sharply with age at any point in time. We know that the baby-boomer generation (born between 1946 and 1964) is much larger than previous demographic cohorts. As the large baby-boomer segment of the population migrates steadily over time into older age brackets, homeownership rates naturally rise. Over the 10-year period, a significant portion of the baby-boomers aged into the phase of their life-cycle that has been characterized by homeownership rates of at least 75 percent (the group aged 45-54). More specifically, baby boomers born between 1946 and 1956 moved from the 35-44 age group (with a 66.2 percent homeownership rate) into the 45-54 age bracket (with a home ownership rate of 74.8 percent). As the boomers continue to age through this decade, we should expect homeownership rates to continue to rise.

Source: US Census Bureau