Affordable Housing, Community Development, Reports and Publications

Harvard Reports Demographics Fail to Accurately Predict Homeownership Rates

Harvard Joint Center for Housing Studies (JCHS)

Preliminary results from a Harvard Joint Center Housing Studies (JCHS) report found that traditional demographic predictors of homeownership (age, race/ethnicity, family type, etc.) contributed relatively little to the variance in homeownership rates since 1985. The fluctuation in homeownership is more strongly influenced by factors such as “home price appreciation, mortgage credit conditions, and … preferences for owning versus renting”.

An analysis evaluated how homeownership rates are impacted by changes in these demographic predictors. The report demonstrated that these variables failed to capture both the sharp increase in homeownership that occurred in the early 1990s and the sharp decrease that began around 2005.

Findings suggest that demographic indicators such as the size of the baby boom and Millennial generations will be insufficient predictors of homeownership rates. Research suggests more accurate measures will include foreclosure rates, credit conditions, and attitudes toward purchasing homes.

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