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

Donald Haurin () and Stuart Rosenthal ()

No 07-01, Working Papers from Ohio State University, Department of Economics

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.

Keywords: Household headship; Household formation; Homeownership rates; Racial gap in homeownership; Black-white differences (search for similar items in EconPapers)
JEL-codes: R21 D10 (search for similar items in EconPapers)
Pages: 43 pages
Date: 2007-01
New Economics Papers: this item is included in nep-ure
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