Trends in Homeownership by Age and Household Income: Factors Associated with the Decision to Own, 1981 to 2006

This paper examines why rates of homeownership have been increasing amongst young higher-income households, but declining among young lower-income households. For the period from 1981 to 2006, household data from the Census of Population, supplemented with information from the Survey of Financial Security, are employed to model the decision to own across the income distribution. The model assesses whether housing market conditions (e.g., the cost of renting versus owning), the financial condition of households (e.g., whether the household has sufficient wealth to make a standard down payment), and demographic factors (e.g., changing family composition) account for these diverging trends in housing demand.