Misleading Comparisons of Homeownership Rates when the Variable Effect of Household Formation Is Ignored: Explaining Rising Homeownership and the Homeownership Gap between Blacks and Asians in the US

Zhou Yu and Dowell Myers
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Zhou Yu: Department of Family and Consumer Studies and the Institute of Public and International Affairs, University of Utah, Alfred Emery Building, Salt Lake City, Utah, 84112, USA, zhou.yu@fcs.utah.edu
Dowell Myers: Population Dynamics Research Group, School of Policy, Planning and Development, University of Southern California, 301 Lewis Hall, Los Angeles, California, 90089-0626, USA, Dowell@usc.edu

Urban Studies, 2010, vol. 47, issue 12, 2615-2640

Abstract: Despite ominous signs of housing market stress in the US, the homeownership rate reached an all-time high in 2006. The conventional definition of homeownership, which is based on the share of households and ignores the effects of variable household formation, confounds the measurement of ‘success’ in achieving homeownership. It is found that, from 1990 to 2006, declining household formation led to an elevated homeownership rate in the US and that this effect varies substantially between racial/ethnic groups. Asians, who achieve high homeownership rates, have the lowest propensity to form independent households, in sharp contrast to African Americans. Asians do not have better access per capita to owner-occupied housing than do Blacks. The conventional measure of homeownership is an incomplete measure of homeownership opportunity because it fails to account for variable household formation. The changing population mix in the US includes groups with different propensities for household formation, thus confusing future assessments of homeownership and the housing market.

Date: 2010
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Persistent link: https://EconPapers.repec.org/RePEc:sae:urbstu:v:47:y:2010:i:12:p:2615-2640

DOI: 10.1177/0042098009359956

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