Joint Center
Housing had another record-setting
money into consumers’ hands. A
four years alone, the number of
for Housing
With mortgage rates
at 30-year lows, the
homeownership rate
and home sales are
year in 1998. Home sales reached
recent Freddie Mac survey reveals
owner households has grown by 5.4
new peaks, housing starts topped
that at least three million homemillion. All age and income groups,
Studies
1.6 million units, and the value of
owners took out more equity in
residential construction hit an all-
of Harvard
cash than they needed to refinance
racial groups have registered home-
time high. With mortgage interest
their loans. Development
rates and unemployment at their
Intensifies Housing production in
minority households have con-
lowest levels since the 1960s, the
1998 stood at its highest level in
tributed over 40 percent of this
national homeownership rate
more than a decade. Including
growth even though they make up
climbed to a record 66.3 percent
manufactured housing, new homes
less than one-fifth of all owners.
last year (Fig. 1). Notwithstanding
have been added at nearly a 1.8
Minorities now account for 30 per-
these impressive achievements,
million unit annual rate since 1996.
cent of first-time homebuyers, up
more progress in addressing the
In 17 states, more housing permits
from just 19 percent in 1985. Even
nation’s housing problems is neces-
were issued last year than during
with these advances, though,
sary. At the same time that home-
the previous peak in the 1980s. The
homeownership rates among
ownership has become a reality for
housing boom has rekindled con-
minorities still lag those of whites
more Ameri-cans than ever before,
cerns over the pace and pattern of
by a substantial margin. A key fac-
the gap between minority and
development. Between 1990 and
tor in this persistent disparity is
white homeownership rates has
1997, home building activity
education and its returns in the
barely narrowed. And despite
exceeded 200,000 units in 8 metro-
labor market. For minorities, the
steady gains in both employment
politan areas, and 100,000 units in
likelihood of becoming a home-
and income, about 4 million
21 metropolitan areas. Most of this
owner increases dramatically with
household types, and ethnic and
ownership gains. Remarkably,
University
at all-time highs.
Meanwhile, progress
remains stalled on
certain longstanding
housing problems.
The State
of the Nation’s
The
overall
agingHousing
1999
of the population
extremely low-income renters still
construction is in medium- and
completion of a bachelor’s degree.
pay more than half their incomes
lower-density counties at the met-
But 38 percent of Hispanics and 12
for housing.Housing Contributes to
ropolitan fringe or beyond (Fig. 2).
percent of blacks aged 25 to 34
Expansion Housing has not only
In fact, nearly one million building
have not even completed high
benefited from the strong economy,
permits issued in nonmetropolitan
school. Moreover, even young
it has also contributed significantly
areas during the 1990s have been in
married, college-educated minori-
to growth. Total spending on home
counties bordering metro areas.
ties have lower ownership rates
building and remodeling was up
Meanwhile, the nation’s largest
than high school-educated whites
nine percent in 1998, to $300 bil-
cities have experienced mixed
with similar demographic charac-
lion. The blistering pace of home
results. While housing permits in
teristics — in large measure because
sales also generated about $2.2 bil-
most locations are up from early
minorities still earn lower median
lion in additional spending by
1990s troughs, a large number of
wages. Affordable Housing Needs
homebuyers making improvements
cities in the Northeast and Mid-
Grow Despite this long economic
to their newly purchased homes.
west continue to experience popu-
expansion, the number of severely
What is more, revenues to business-
lation losses. In contrast, strong
cost-burdened renters remains stub-
es and state and local governments
economic growth in dozens of large
bornly high. In 1995, almost 3.9
from home selling activity surged
cities in the South and West contin-
million unsubsidized households
by about 17 percent. Heavy mort-
ues to attract new residents.
with extremely low incomes spent
gage refinancing also put more
Homeownership Booms In the past
more than half their incomes on
Joint Center for Housing Studies
of Harvard University
Graduate School of Design
John F. Kennedy School of Government
Principal funding for this report was provided by
the Ford Foundation and the Policy Advisory Board
of the Joint Center for Housing Studies.
Additional support was provided by:
Association of Local Housing Finance Agencies
Fannie Mae Foundation
Federal Home Loan Banks
Freddie Mac
Housing Assistance Council
Mortgage Bankers Association of America
National Association of Housing and Redevelopment Officials
National Association of Realtors
National Council of State Housing Agencies
National Housing Endowment
National Low Income Housing Coalition
National Multi Housing Council
Research Institute for Housing America
The opinions expressed in The State of the Nation’s Housing: 1999 do not necessarily
represent the views of Harvard University, the Policy Advisory Board of the Joint Center for
Housing Studies, the Ford Foundation, or the other sponsoring agencies.
Executive Summary
Housing had another record-setting
And despite steady gains in both
ments from home selling activity
year in 1998. Home sales reached
employment and income, about
surged by 17 percent.
new peaks, housing starts topped
four million extremely low-income
1.6 million units, and the value of
renters still pay more than half
Heavy mortgage refinancing activi-
residential construction hit an all-
their incomes for housing.
ty also put more money into consumers’ hands. A recent Freddie
time high. With effective mortgage
Housing Contributes to Expansion
interest rates and unemployment
Mac survey reveals that over three
million homeowners took out more
at their lowest levels since the
1960s, the national homeowner-
Housing has not only benefited
equity in cash last year than they
ship rate climbed to a record 66.3
from the strong economy, but it
needed to refinance their loans.
percent last year (Fig. 1).
has also contributed significantly
Development Intensifies
to its growth. Total spending on
Notwithstanding these impressive
home building and remodeling
achievements, progress on certain
was up nine percent in 1998, to
Housing production in 1998 stood
longstanding housing problems
$300 billion. The blistering pace of
at its highest level in more than a
remains stalled. At the same time
home sales generated about $2.2
decade. Including manufactured
that homeownership has become a
billion in additional spending by
housing, new homes have been
reality for more Americans than
homebuyers making improvements
added at nearly a 1.8 million unit
ever before, the gap between
to their newly purchased homes.
annual rate since 1996. In 17
minority and white homeowner-
What is more, revenues to busi-
states, more housing permits were
ship rates has barely narrowed.
nesses and state and local govern-
issued last year than during the
previous peak in the 1980s.
1
With Mortgage Interest and Unemployment Rates
at 30-Year Lows, Homeownership has Soared
18
67
of development. Between 1990 and
66
1997, home building activity
65
exceeded 200,000 units in 8 metro-
16
64
14
63
12
62
10
61
60
8
59
6
58
4
57
2
56
1966
1970
1974
Homeownership Rate
1978
1982
1986
Effective Interest Rate
1990
1994
concerns over the pace and pattern
1998
Homeownership Rate (Percent)
Unemployment/Interest Rate (Percent)
20
The housing boom has rekindled
politan areas, and 100,000 units in
21 metropolitan areas. Most of this
construction is in medium- and
lower-density counties at the metropolitan fringe or beyond (Fig. 2).
In fact, nearly one million building
permits issued in nonmetropolitan
areas during the 1990s have been
in counties bordering metro areas.
Unemployment Rate
Note: Break in homeownership series in 1993 is due to change in Census methodology.
Sources: Homeownership from Census Bureau Series H-111; effective mortgage
interest rate from Federal Housing Finance Board; unemployment rate from
Bureau of Labor Statistics.
Meanwhile, the nation’s largest
cities have experienced varying
rates of growth. While housing
permits in most locations are up
up less than 20 percent of all own-
have lower ownership rates than
from early 1990s troughs, a large
ers. Minorities now account for 30
high school-educated whites with
number of cities in the Northeast
percent of first-time homebuyers,
similar demographic characteristics
and Midwest continue to lose pop-
up from just 19 percent in 1985.
— in large measure because minori-
ulation. In contrast, strong eco-
ties still earn lower median wages.
nomic growth in dozens of large
Even with these advances, though,
cities in the South and West con-
homeownership rates among
tinues to attract new residents.
minorities still lag those of whites
by a substantial margin. A key fac-
Despite this long economic expan-
tor in this persistent disparity is
sion, the number of severely cost-
education and its returns in the
burdened renters remains stub-
In the past four years alone, the
labor market. For minorities, the
bornly high. In 1995, almost 3.9
number of owner households has
likelihood of becoming a home-
million unsubsidized households
grown by 5.4 million. All age and
owner increases dramatically with
with extremely low incomes spent
income groups, household types,
completion of a bachelor’s degree.
more than half their incomes on
and ethnic and racial groups have
But 38 percent of Hispanics and 12
housing. Although changes to fed-
registered homeownership gains.
percent of blacks aged 25 to 34
eral data sources make more current
Remarkably, minority households
have not even completed high
estimates impossible, this number
have contributed over 40 percent of
school. Moreover, even young,
has likely grown in the past four
this growth even though they make
married, college-educated minorities
years because incomes have not
Homeownership Booms
2
Affordable Housing Needs Grow
kept pace with rents.
2
While the jury is still out on the
Development Is Increasingly Concentrated in
Medium- and Low-Density Counties
success of welfare reform, its
Thousands of Permits
impact on housing needs is becoming clearer. If recent experience is
any guide, the wages ex-recipients
High
County Population Density
earn — at least initially — are
inadequate to cover the costs of a
Med-High
modest two-bedroom rental without exceeding the 30-percent-of-
Medium
income standard. At today’s rent
levels in eight states, at least two
Med-Low
people in each household would
have to work full time earning
Low
$7.00 an hour to comfortably
afford this type of housing (Fig. 3).
0
50
1990
100
150
200
250
300
350
400
450
1997
On the supply side, 337,000
Notes: Population densities defined using 1990 population and land area. Each
density category contained one-fifth of the US population in 1990.
unsubsidized units affordable to
Sources: Joint Center county database; Census Bureau Series C-40.
extremely low-income renters were
lost between 1991 and 1995. The
3
The Working Poor Are Struggling to Afford
Even Modest Rentals
Number of Full-Time Jobs Needed to
Rent a Typical Two-Bedroom Apartment
number of units receiving direct
federal subsidies has also dropped
by 65,000 in the past four years
alone. Meanwhile, federal programs have replaced long-term
subsidy contracts with annual
extensions, leaving a growing
share of landlords free to opt out
at almost any time.
Contracts on another million units
will expire within five years, many
1.2 to 1.4 Jobs
1.5 to 1.7 Jobs
1.8 to 1.9 Jobs
2.0 to 2.9 Jobs
of which are located in areas with
rising market rents. Tens of thousands of very low-income renters —
Notes: Assumes 1998 Fair Market Rents, take-home wages of $7 per hour, a
40-hour work week, and a rent burden of no more than 30% of income. Modeled
on the National Low-Income Housing Coalition methodology.
Source: Joint Center analysis using HUD Fair Market Rents.
many of them elderly — may face
stiff rent hikes or be forced to leave
in search of more affordable units
renters will demand more expensive
function safely within their homes
that accept “portable” subsidies.
and amenity-rich apartments.
will therefore increase. As these
seniors grow more infirm, though,
Expanding Housing Opportunities
Meanwhile, the “echo boomers”
independent living will become
will be gradually entering the hous-
more difficult and alternative
Over the next decade, the pace of
ing market, fueling demand for
arrangements combining healthcare
household growth should match or
rentals and starter homes. The chil-
with housing will gain popularity.
slightly exceed the 1.1-1.2 million
dren of the baby boomers differ
annual rate averaged in the 1990s.
from their parents in important
The overall aging of the popula-
Including manufactured homes,
ways that affect their housing pref-
tion thus favors rising homeowner-
the number of housing units added
erences. In particular, more echo
ship rates, strong home building
should thus be on par with the 16
boomers are immigrants or second-
and remodeling activity, and
million or so built in this decade.
generation Americans. More will
record home sales well into the
have college degrees, more of the
next decade. Unfortunately, the
As the baby boomers reach their
women will work, and more will
enduring strength of housing mar-
40s, 50s, and early 60s, they will
delay marriage and childbearing.
kets may add to the affordability
continue to drive both homeowner-
problems of poor households with
ship rates and home values to new
At the same time, most of the par-
weak income growth. Indeed, with
heights. They will also spend more
ents of the baby boomers are now
housing costs on the rise, expand-
on remodeling their older and more
past 70 and an unprecedented share
ing the supply of low-cost units
valuable properties, further stimu-
is expected to live well past the age
and preserving the subsidized stock
lating housing investment. Those
of 80. Demand for structural modi-
will be especially important hous-
boomers who remain or become
fications that allow the elderly to
ing challenges.
3
Housing Markets
Housing markets turned in another
low housing production were at
Housing Production Surges
1990s peaks, including several
stellar performance in 1998, set-
states in the Midwest and Northeast.
ting new records for home sales as
Housing starts jumped nearly 10
well as for the value of residential
percent to 1.6 million units last
construction (Fig. 4). Single-family
year, and were up strongly in the
No state displayed major signs of
production stood at levels not
first quarter of 1999 over the first
housing market weakness relative
seen since the 1970s, and multi-
quarter of 1998. Housing permits
to 1997. In the 10 states where
family construction achieved a
reached 1990s peaks in 32 states
permits declined last year, the
fifth straight year of growth.
and eclipsed their previous cyclical
losses were only modest. Of this
Condominium sales also heated
peaks in 17 (Fig. 5).
group, Arkansas, Nebraska,
Oregon, and West Virginia issued
up to a record 655,000 unit
4
seasonally adjusted annual rate
California, Florida, Georgia, North
more permits in 1998 than in peak
in the first quarter of 1999.
Carolina, and Arizona — which
years of the 1980s. Still, produc-
together account for nearly a third
tion in many states — including
Housing has drawn its strength
of total 1998 production — all
Alaska, California, and Hawaii —
from the lowest effective mortgage
posted their best year since 1991.
remains well below 1980s levels.
interest rates in 30 years. In addi-
Indeed, it was the best year ever
tion, 1998 marked the third con-
for Georgia and North Carolina. In
Single-family production registered
secutive year of tame inflation,
many of these states, permits were
its best year since 1978, exceeding
low unemployment, and nearly
double or triple their recession
1980s peaks in 29 states. Multi-
four percent economic growth.
lows. Even markets with relatively
family housing increased its share
of total production from a low of
11 percent in 1993 to 18 percent in
1998. Although its share fell from
4
Home Production and Sales Reached All-Time
Highs in 1998
8
about 19 percent in 1995 to 17
percent last year, manufactured
housing production continued to
300
grow. Indeed, manufactured housing accounted for more than a
250
6
third of 1997 home production in
Millions of Units
4
150
100
Billions of 1998 Dollars
200
10 states.
Housing Outpaces the Economy
The 9.4 percent surge in combined
2
50
spending on home building and
remodeling provided a substantial
0
0
1975
1980
1985
1990
Value of New Residential Construction (Right Scale)
Existing Home Sales (Left Scale)
New Home Sales (Left Scale)
Source: Table A-1.
1995
1998
lift to the national economy in
1998. Strong home sales, mortgage
refinance activity, and home equity lending also helped to fuel
5
Housing Production Has Topped 1980s Peaks in
One Out of Every Three States
1998 Permits as Share of 1980s Peak
up cash through lower mortgage
payments. A 1998 Freddie Mac
survey indicates that about half of
the six million homeowners who
refinanced last year took out new
mortgage loans that were at least
five percent larger than the ones
they retired. By comparison, only
about a third of borrowers drew
on their home equity to such an
extent during the record refinancing boom of 1993. What is more,
0% to 50%
51% to 100%
101% to 125%
the median amount of cash taken
126% to 186%
out in 1998 equaled 11 percent of
Source: Census Bureau Series C-40.
the home value, up from 6 percent
in 1993.
growth. Including lender and bro-
At the same time, heavy refinanc-
Borrowing against home equity in
ker fees, transfer and title taxes,
ing activity pumped money into
the form of second mortgages and
and fixed costs, home sales directly
the economy, both by allowing
lines of credit has also surged in
contributed $60-70 billion to the
homeowners to borrow against
the past five years (Fig. 6). Even
economy and generated about
their home equity and by freeing
after adjusting for inflation, home
$12-14 billion in state and local
tax revenues. Indeed, sales-related
6
revenue grew more than four times
faster than the economy in general
Growth of Home Equity Borrowing Has Pumped
Cash Into the Economy
Home Equity Loans Outstanding
and helped to offset weakness in
other sectors.
450
400
Strong home sales also stimulate
Joint Center estimates, buyers of
existing homes spend roughly
$1,900 more, and buyers of new
homes about $1,300 more, on
350
Billions of 1998 Dollars
remodeling activity. According to
300
250
200
150
improvements within the first year
100
of purchase than owners who do
not move. Growth in home sales
thus generated about $2.2 billion
in additional home improvement
spending in 1998 over 1997.
50
0
1993
1994
1995
1996
1997
Source: Federal Reserve Bulletin, ”Recent Developments in Home Equity Lending,”
April 1998, p. 248.
5
Since the
beginning of the
equity lending of this type rose
can continue will
some 45 percent between 1993 and
depend primarily on
1997 — more than 10 times faster
the strength of job
than the 3.9 percent rise in home
growth and the direc-
issued more than
A-4). Topping the list
prices. Not all of this $130 billion
tion of mortgage
100,000 permits.
are Washington, DC
became available for spending,
interest rates. While
with more than
however, since more than half of
exceeding expecta-
330,000 permits, Los
these borrowers used some portion
tions throughout this business
Angeles with nearly 310,000,
of their equity loans to pay off
cycle, the vigor of housing produc-
Atlanta with 303,000, and Chicago
higher interest-rate debt. Never-
tion, home sales, and refinancing
with 276,000.
theless, second mortgages helped
activity will be difficult to sustain.
decade, 21
metropolitan
areas have
even these homeowners spend
more on goods and services by
issued more than
100,000 permits (Table
When mapped, the extent of
Decentralization Continues
reducing their debt payments.
6
ropolitan areas have
development around many of
the nation’s large metropolitan
Home building has set a spectacu-
areas becomes apparent (Fig. 7).
For all these reasons, housing has
lar pace, exceeding 10,000 units
Southern California, the San
made important contributions to
in 240 counties across the country
Francisco Bay area, southern
this unprecedented economic
from 1990 to 1997. Since the
Florida, southern Arizona, the
expansion. Whether this support
beginning of the decade, 21 met-
Boston-Washington corridor in
general (and Seattle, Portland,
Las Vegas, Denver, Chicago, and
7
Many Areas Across the Country Have Experienced
Intense Home Building Activity
Counties Adding at Least 10,000 Homes, 1990-1997
Atlanta in particular) have all
experienced heavy building activity outside traditional city centers.
But so too have smaller metropolitan areas such as Mobile, AL,
Boise, ID, and Greenville, SC.
Development is pushing to the
boundaries of metropolitan areas
and spilling over into nonmetropolitan areas. One indicator of this
growth is the number of housing
permits per thousand people,
which conveys the intensity of
new construction relative to the
population already residing in a
particular county. By this measure,
Notes: Annual place-level permit data aggregated to counties. Does not include
manufactured housing. The extent of growth in the Southwest appears somewhat
exaggerated because the counties in that region are particularly large.
medium-density counties are
Source: Census Bureau Series C-40.
development, averaging 54 permits
undergoing the most intense
per thousand people in the South,
Population Trends
(Fig. 8). In nearly all cases, the losses
continued even as their metropoli-
52 in the Midwest, 51 in the West,
and 29 in the Northeast. In fact,
Domestic and foreign immigration
tan areas gained population. With
even the low-density counties in
patterns continue to strongly favor
domestic migrants primarily head-
the West registered a rate of 46 per-
the South and West. Indeed, the
ed to the South and West, it will be
mits per thousand people.
share of the population living in
difficult for these cities to attract
the West has now surpassed that in
residents back to their centers.
Nationwide, 14 counties that
the Northeast. In addition, the
issued 10,000 or more permits dur-
South’s share of the US population
In contrast, dozens of large cities
ing the 1990s also averaged more
is at its highest level since before
in the South and West have man-
than 150 permits per thousand
the Civil War. As a result, major
aged to parlay regional economic
people. Assuming an average of
metropolitan areas in the South
growth into city population growth
three persons per household, this
and West have experienced the
(Table A-5). Even so, San Antonio is
level of activity means that almost
fastest growth during the 1990s,
the only one of the 39 largest met-
half as many permits were issued
with development pressures
ropolitan areas where population
as there were households. More-
extending into the surrounding
growth in the city exceeded that in
over, four of these counties (Clark
nonmetropolitan areas.
the suburbs between 1990 and
1996. San Antonio is an exception
County in Nevada, Collin County
in Texas, Collier County in Florida,
While the suburbs continue to
because its central city spans 333
and Douglas County in Colorado)
grab population share from central
square miles and contains 75 per-
issued 30,000 or more permits
cities in all four regions, there are
cent of the metro area population.
between 1990 and 1997.
hopeful signs that the exodus from
Many of the other fast-growing
some of the nation’s largest cities is
cities — such as Charlotte, Orlando,
Meanwhile, more Americans in the
reversing. Both Boston and New
and Phoenix — also include large
1990s than in the 1980s have been
York posted modest population
tracts of undeveloped land within
bypassing metropol-
gains from 1994 to
itan areas altogether
their boundaries.
1996. These cities, how-
For the first
ever, would have contin-
While up overall since the 1980s,
ued to lose population
population growth in nonmetro-
tion growth in
to domestic outmigra-
politan areas is uneven. Population
1970s, the pace of
nonmetropolitan
tion if not for the arrival
continued to decline in just over a
growth of the non-
areas is
of foreign immigrants.
quarter of the more than 2,200
metro population is
approaching
approaching that of
growth in metro-
Indeed, many cities con-
1997, with ongoing losses concen-
politan areas.
tinued to lose population
trated in Appalachia, the Great
tion. In addition, 60
through the mid-1990s,
Plains, and the Mississippi delta
percent of the 1.6
including Baltimore,
region. But these declines were
in choosing where
to live. For the first
time since the
the metro popula-
time since the
1970s, popula-
nonmetro counties from 1990 to
million nonmetropolitan housing
Buffalo, Chicago, Cincinnati, Cleve-
more than offset by gains in loca-
permits issued since 1990 have
land, Milwaukee, New Orleans,
tions adjacent to metropolitan
been in counties adjacent to met-
Philadelphia, Pittsburgh, Rochester,
areas, and also in retirement desti-
ropolitan areas.
St. Louis, and Washington, DC
nations and communities that
7
8
Population Growth in Large Cities Lags Gains in
Surrounding Areas
Annual Average Percent Change in Population, 1990-1996
the next decade and the
aging of the overall hous-
1% +
San Antonio
Charlotte
Dallas
Denver/Aurora
Houston
Phoenix/Mesa
Portland
Salt Lake City
ing stock will also serve
to boost spending on
home improvements,
repairs, and alterations.
Unless the baby boomers
8
0 to 0.99%
Negative
City Growth
New York
Boston
Buffalo
Cleveland/Akron
Detroit
Hartford
Philadelphia
Pittsburgh
Providence
Rochester, NY
St. Louis
Less than 1%
Columbus
Kansas City
Los Angeles
Miami
Norfolk
San Diego
San Francisco
Seattle
Tampa/St. Petersburg
Atlanta
Indianapolis
Orlando
Sacramento
Baltimore
Chicago
Cincinnati
Milwaukee
New Orleans
Washington, DC
Minneapolis/St. Paul
and their children reverse
what is now a centurylong trend toward decentralized development,
home building activity
will remain concentrated
at the metropolitan
fringe and beyond. And
although some urban
areas could see turnarounds, the share of the
US population living in
central cities is likely to
continue to decline unless
key issues such as school
1% to 1.99%
2% +
quality and public safety
Surrounding Area Growth
are addressed.
Notes: Large cities defined as the primary named city of the MSA/CMSA plus any other
city in the metro area with a population greater than 200,000 in 1990. Surrounding
area defined as the remainder of the metro area. New York includes Newark and Jersey
City. Los Angeles includes Long Beach, Anaheim, Santa Ana and Riverside. San Francisco
includes San Jose and Oakland. Dallas includes Ft. Worth and Arlington.
Source: Table A-5.
While the South and
West will continue to
draw population on
net from the Northeast
and the Midwest, most of the
specialize in services and manufac-
at a rate similar to the 1.6 million
growth is expected to occur in just
turing. In fact, population growth
unit annual pace averaged so far in
a few states — including Arizona,
in nonmetro retirement communi-
the 1990s. With the leading edge
Colorado, Florida, Georgia, Oregon,
ties was up a remarkable 19 per-
of the baby-boom generation well
North Carolina, Texas, and Wash-
cent between 1990 and 1997.
into their peak earning years and
ington. Growth patterns could,
the trailing edge fast approaching,
however, change if quality-of-life
strong demand for larger, well-
and environmental concerns lead
appointed new homes will keep
to constraints on land supply
Over the next decade, residential
construction values climbing. The
and make housing in these areas
construction will probably proceed
addition of 16 million homes over
less affordable.
Housing Market Prospects
Demographic Drivers of Demand
Growth in the number of households
will come from the movement
growth of this population group
is the single largest source of resi-
of the population into ages with
over the next 10 years.
dential construction demand,
higher household headship rates
accounting for over 70 percent of
(the share of individuals heading
The echo boomers are already
home building activity during the
independent households). The
beginning to reverse the recent
1990s. The rest of demand comes
remaining 10 percent of the
decline in the young-adult popula-
from the replacement of housing
growth will result from the over-
tion, adding an average of about
lost to abandonment or disaster,
all rise in headship rates caused
20,000 each year to the ranks of
expansion of the stock of second
by relatively high divorce rates,
households headed by 18 to 24
homes, and the increase in the
declining marriage rates, and low
year-olds (Fig. 9). The number of
number of vacant units needed to
remarriage rates.
households headed by 25 to 34
year-olds will also show substantial
accommodate the turnover gener-
The Echo Boomers
ated by movers.
increases after 2005. By 2010, the
echo boomers will account for
Over the next decade, the number
The 84 million native-born chil-
more than one in ten owner and
of US households should continue
dren of the baby boomers make up
four in ten renter households.
to increase by an average of 1.1-1.2
the lion’s share of the so-called
million annually, adding to the
“echo-boom” generation born
Today as the first echo boomers
roughly 104 million that exist
since 1977. Another five million
enter the housing market, they
today. While immigration will
foreign-born individuals living in
face economic conditions that are
contribute about a quarter of this
the US are also echo boomers, and
remarkably similar to those their
growth, 65 percent of the increase
immigration will continue to fuel
parents encountered when they
started to form households in the
mid- to late-1960s — strong GDP
9
growth, accompanied by low infla-
The Echo Boomers Are Reversing Recent
Declines in the Number of Young Households
while market conditions are comparable, the echo boomers them-
1,500
Change in Number of Households (Thousands)
tion and low unemployment. But
selves differ in notable ways that
1,000
affect their housing choices.
500
Compared with the postwar baby
0
boomers who reached young adult-
-500
hood around 1968, the leading
edge of the echo boom is more
-1,000
racially and ethnically diverse. The
-1,500
first wave of echo boomers is also
more educated than their parents
-2,000
1990-1995
Age 18 to 24
Source: Table A-2.
1995-2000
Age 25 to 34
2000-2005
2005-2010
were at the same ages, although
they earn slightly less. In addition,
more women in this age group are
9
10
Leading-Edge Echo Boomers Are More Diverse
and Slower to Marry
Percent in Each Category at Ages 18 to 22
Baby Boom
population growth as much as predicted. The fact is that only indi-
Echo Boom
viduals in their late teens have a
Population
Minority
Foreign-Born
Second-Generation
16.8
3.4
9.8
34.0
10.1
11.7
Never Married
Women in Labor Force
67.0
52.3
88.4
66.1
net migration pattern favoring
urban areas, possibly because of the
attractions of city-based colleges
and universities. By ages 20 to 24,
young adults are already moving to
the suburbs.
Households
Single-Person
Married-Couple
Any Household with Children
13.7
69.0
43.5
23.1
21.4
32.4
Homeownership Rate
Single-Person
16.2
8.5
15.2
11.4
Senior Households
At the same time that the children
of the baby boomers are growing to
Sources: Echo-boom race and immigrant characteristics are for people aged 18-22
from the 1998 Current Population Survey. Baby-boom race and immigrant characteristics are for people aged 20-24 from the 1970 Census PUMS files. Household characteristics are for households with heads aged 18-22 from the 1968 and 1998 Current
Population Surveys.
young adulthood, their parents are
reaching their 70s and 80s. With
life expectancies rising, the fastest
growing segment of the elderly
10
population will be age 85 and
in the labor force today than in
boomers at the same ages. On aver-
older. Currently, over 70 percent
1968 (Fig. 10). And most important
age, the echo boomers also have
of this age group are women, most
for housing demand, larger shares
fewer siblings and wealthier par-
of whom are widows living alone.
of leading-edge echo boomers live
ents than the previous generation,
alone. Even so, the first echo
and may therefore receive more
Despite infirmities that increase
boomers have only slightly lower
family help in making a downpay-
with age, the overwhelming majori-
homeownership rates overall than
ment on a home.
ty of seniors want to — and do —
their parents did, in part because
remain in their homes.
relatively more single echo
The echo boomers
boomers are buying homes.
will have the biggest
will have the
with members aged 70
impact on housing
biggest impact
and over living outside
on housing
institutions, only 3 per-
and West. They
markets in the
cent reside in assisted or
buying success remains to be seen.
already make up a
South and West.
congregate facilities that
Slightly lower earnings relative to
larger share of the
their parents, combined with rising
population in these regions than
or personal-care services. Of the
home prices, will make buying more
elsewhere, and continued migra-
remaining 97 percent, about 42 per-
difficult if interest rates climb.
tion will only add to their concen-
cent live alone, 34 percent with
Nevertheless, it is noteworthy that
tration. Although heralded by some
spouses, and 24 percent with others.
echo boomers who marry are far
as a boon to central cities, the
more likely to be in dual-earner
movement of the echo boomers
Senior living arrangements take a
households than married baby
into their 20s may not bolster city
variety of forms. In 10 percent of
Whether the next wave of echo
boomers will have as much home-
markets in the South
The echo boomers
Of those households
provide health, domestic,
11
households with an elderly mem-
The Share of Households with Seniors Receiving
Care in Various Settings Increases With Age
ber, the senior has moved in with
a caregiver or a caregiver has moved
Age
70 to 79
in with him or her. Another 20
percent are supported by friends or
family who already live in the
home or visit to provide help. Only
Age
80 to 89
about 7 percent get assistance from
outside organizations or unrelated
individuals. Regardless of the setting, though, the proportion
Age
90 or Older
receiving care increases with the
0
age of the senior (Fig. 11).
10
20
30
40
50
60
70
80
90
100
Reside in Assisted Living or Congregate Facility
Moved in with Helper/Helper Moved In
Receive Help from Outside Organization or Nonrelative
Although 5.0 million households
Receive Help from Other Caregiver
now include a senior citizen with
Without Help
disabilities, just 2.1 million express
Note: Age refers to the oldest member of the household.
the need for structural modifica-
Source: Joint Center tabulations of the National Institute on Aging’s Assets
and Health Dynamics Among the Oldest-Old (AHEAD) Survey, 1993-94.
tions to their homes to function
11
safely and comfortably. And only
about half of these households
actually have the modifications they say they need
(Fig. 12). With the number
12
Only Half of Households With Disabled Seniors
Have the Home Modifications They Need
Households Expressing Need for Modifications, 1995
of households headed by a
person aged 65 or older
rising by about 300,000
Handrails and
Grab Bars
1,309
638
decade, demand for such
Bathroom
Modifications
486
home modifications will
Extra-Wide Doors
or Hallways
clearly grow.
309
Elevator or
Stair Lift
305
Perhaps the biggest impact
Kitchen
Modifications
that seniors will have on
207
housing markets, however,
Door Handles
Instead of Knobs
193
will come when they
Modified Faucets
or Cabinets
depart their homes for
130
smaller or more appropri-
0
20
Share With Modification
40
60
80
Share Without Modification
ate units, move in with
other individuals, or die.
Note: Excludes all households with seniors that did not express need for
structural modifications.
Given that elderly owners
Source: Joint Center tabulations of the 1995 American Housing Survey.
100
Thousands of Households
Ramp
per year over the next
With the baby
seldom make discretionary improvements to their
boomers struggling to care
for their aging
parents, public
homes, the new own-
attention will
able elderly populations because
nificant impact on what
they provide popular retirement
home-based health and
destinations. While the states in
personal-care options
the Western and Mountain
ers of these units are
increasingly
remain viable and
regions, along with those in the
likely to invest in
focus on the
affordable in the future.
Southeast (excluding Florida),
substantial modifica-
intersection of
tions or upgrades to
housing and
Because the elderly pop-
lations today, these locations are
their properties.
healthcare.
ulation is concentrated
expected to show the fastest
geographically, the
growth in senior households over
effects of their housing
the next 20 years.
With increasing
12
Medicare will have a sig-
have relatively small elderly popu-
numbers of baby boomers strug-
choices will be felt most strongly
gling to care for their elderly par-
in certain markets. Some states —
ents and the leading edge of the
particularly in New England, the
boomers themselves only 12 years
Great Plains, and the Mid-Atlantic
Now accounting for just over 10
away from retirement, more public
region — have large shares of
percent of the US population, for-
attention will become focused on
seniors simply because young
eign-born households are impor-
the intersection of housing and
adults have moved away to other
tant contributors to housing
healthcare. In the meantime,
parts of the country. Others, such
demand. Although generalizing
efforts under way to reform
as Florida and Arizona, have siz-
across immigrant households —
13
Foreign-Born Households
Immigrant Adults Residing Together Are a Potential Source of
New Households
Percent of Households Under Age 45 Sharing Quarters
30
25
20
15
10
5
0
With Any
Adult Relative
Native-born
With Any Adult
Non-Relative
Head from Europe/Russia
With Parent
With Adult
Sibling
Head from Asia
Head from Latin America
Notes: Immigrant defined as any foreign-born person. Adult relatives exclude spouse.
Source: Joint Center tabulations of the 1998 Current Population Survey.
With Adult
Child
With Other
Adult Relative
even of the same nationality — is
These cultural patterns have impli-
homeowners. Indeed, homeowner-
risky, their living arrangements do
cations for future housing demand
ship rates among second-generation
differ from those of the native-born
as well as for current consumption.
households under age 30 far exceed
population in specific ways that
Foreign-born adults who currently
those of same-aged immigrants.
affect their housing preferences.
share a single unit are a potential
Moreover, their ownership rates
wellspring of new households.
approach those of other native-born
For example, even after accounting
Over time, the household headship
Americans even though they are
for the younger age structure of
rates of immigrants converge with
more concentrated in metropolitan
the foreign-born population, a
those of the native-born popula-
and Western areas where ownership
larger share of immigrants under
tion. For example, immigrants aged
rates are relatively low. Their prog-
the age of 45 head married-couple
20 to 29 in 1980 were 83 percent
ress is not wholly surprising given
households with children. Some
as likely as native-born individuals
that the share of younger second-
54 percent of Latin American
to head their own households.
generation Americans with a bache-
immigrants head this type of
By 1990, though, these same
lor’s degree or higher approximates
household, compared with 40 per-
immigrants (then aged 30 to 39)
that of same-age native-born
cent of native-born Americans of
were 92 percent as likely to head
Americans, and their median house-
all races and ethnicities.
households.
hold incomes are also similar.
At the same time, the foreign-born
Second-Generation Americans
Like foreign-born households who
have been in the United States for
are also more likely to live with
other adults (excluding spouses).
Over half of the country’s 28.3 mil-
several years, second-generation
While native-born households more
lion second-generation Americans
Americans are less likely to live in
commonly include an unmarried
(native-born children
partner, immigrant households are
more apt to include parents, adult
of immigrants) are
under the age of 30.
siblings, or other adult relatives
Although represent-
(Fig. 13).
ing only a small share
of today’s households,
central cities than
Many secondgeneration
Americans have
already taken
advantage of
economic mobility
recent immigrants.
Since they are also
unlikely to live in nonmetropolitan areas,
second-generation
Household composition varies not
these younger second-
in the United
Americans have a sig-
only between the foreign- and
generation Americans
States to become
nificantly greater pres-
native-born, but also among immi-
make up nearly a
grants from different regions. For
sixth of the echo-
(in percentage terms)
instance, Asian and Latin American
boom population. As
than even those whose
immigrants are much more likely
such, they will have a growing
families have been in this country
to have adult siblings and adult
influence on housing demand over
for more than two generations.
cousins, aunts or uncles living in
the next decade.
homeowners.
their households than European or
ence in the suburbs
Geographic Impacts of
Immigration
Russian immigrants. Asians are more
Many second-generation
likely than any other group to
Americans have already taken
have a parent living with them
advantage of economic mobility
While media attention has focused
and least likely to be single parents.
in the United States to become
on the growing pluralism of the US
13
population, most locations remain
14
The Impact of Immigration Is Greatest in
Gateway Areas and the West
Percent of Young Households Headed by Immigrants
or Their Children, 1998
untouched by the sharp influx of
immigrants since the 1980s. The
Gateway Metros
vast majority of foreign-born households and second-generation
Americans live in just 11 “gateway”
metropolitan areas. Indeed, immigrants or their native-born children
make up a third of all young house-
WEST
Large Metros
Smaller Metros
Nonmetro
NORTHEAST
holds in these gateways (Fig. 14).
Large Metros
Outside these metro areas, the
Smaller Metros
impact of immigration is most
Nonmetro
noticeable in a handful of Western
MIDWEST
states. Immigrants and their USborn children account for about 20
percent of households under age
45 in large Western metro areas, 26
14
percent in smaller metro areas, and
14 percent in nonmetro areas.
Large Metros
Smaller Metros
Nonmetro
SOUTH
Large Metros
Elsewhere in the country, though,
these shares are a modest 10 percent in metropolitan areas and 5
Smaller Metros
Nonmetro
percent in nonmetropolitan areas.
0
Household Prospects
Notes: Gateway metros include Los Angeles, New York, San Francisco, Miami,
Chicago, Washington, DC, Houston, San Diego, Boston, Dallas and
Philadelphia. Large metros have population over 1 million. Nonmetro
contains some small metros not identified by the Census Bureau. Young
households defined as under age 45.
While the baby boomers will con-
Source: Joint Center tabulations of the 1998 Current Population Survey.
5
10
15
20
25
30
35
tinue to dominate housing markets
over the next 10 years, their parents and their children are begin-
from retirement age, many have
Barring a significant change in
ning to exert a growing influence
parents who are now in their late
immigration policy, the foreign-
on demand. In keeping with the
70s, 80s, and even 90s. Since most
born population will continue to
general shift of the population to
of these seniors live in convention-
account for a substantial share of
the South and West, the racially
al housing, the demand for home
household growth. Although sec-
and ethnically diverse echo
modifications to deal with the
ond-generation Americans are
boomers will make their presence
infirmities of aging will increase.
more apt to move away from the
felt particularly in these regions.
Meanwhile, the baby boomers will
gateway areas than their parents,
become increasingly involved in
immigrants and their adult children
With the leading edge of the baby-
the search for new housing alterna-
will likely remain concentrated in
boom generation still 12 years
tives for the elderly.
relatively few areas of the country.
Homeownership Trends
With effective mortgage interest
further, they will not give much
Meanwhile, women living alone or
rates at their lowest levels in three
additional lift to homebuying.
heading single-parent households
have increased as a share of home-
decades, the national homeowner-
Broad-based Gains
ship rate reached a new high of
buyers from 10 percent in 1985 to
15 percent in 1997.
66.3 percent in 1998 and has
continued to rise in 1999. Even
Households of all ages and races
though home prices climbed 3.8
have made impressive homeowner-
Homeownership gains are particu-
percent faster than general price
ship progress since 1994 (Fig. 16).
larly dramatic among low-income
inflation between 1997 and 1998,
After dropping by over three per-
and minority households. Falling
favorable interest rates pushed the
centage points between 1983 and
interest rates and specially tailored
after-tax costs of a typical home
1992, homeownership rates among
mortgage loan programs have
down by 1.7 percent (Fig. 15).
younger households (under age 35)
given a significant boost to low-
have recovered lost ground despite
income homebuying. Between
Mounting pressures could, howev-
declining shares of married cou-
1993 and 1997, loans to buyers
er, slow the pace of homeowner-
ples. The homeownership rate
with incomes less than 80 percent
ship growth even if the economy
among young unmarried adults
of the local median increased by
continues to prosper. House price
has also jumped 2.2 percentage
38 percent, compared with 25 per-
inflation has already made it more
points from its previous high of
cent for higher-income buyers. At
difficult for marginal borrowers in
21.4 percent, placing the baby-bust
the same time, the minority share
some areas to save enough to buy a
generation (born from 1965 to
of first-time homebuyers climbed
home. And because mortgage inter-
1977) on a higher homeownership
from just 22 percent to 30 percent.
est rates are unlikely to fall much
trajectory than past generations.
While immigration flows have
helped to lift the minority share
15
of net additional homeowners
Homeownership Costs Are Holding Near 20-Year
Lows Despite Rising Prices
to above 40 percent over the
1998 Dollars
150
past four years, they have also
1,200
masked the progress of some
120
achieving homeownership. For
example, when foreign-born
800
90
600
60
400
Monthly Payment
Price of Typical Home (Thousands)
native-born minorities in
1,000
Hispanic households enter this
country, they start out with
lower homeownership rates
than US-born Hispanic households and never close the gap.
30
200
As a result, while homeownership rates among Hispanic
0
0
1975
1980
Home Price
Source: Table A-7.
1985
1990
Monthly After-Tax Housing Payment
1995
1998
immigrants only inched up
from 37 percent in 1994 to 38
percent in 1998, rates among
15
16
All Groups Have Achieved Homeownership Gains
Percent of Each Group Owning Homes
grant shares. But even when
RACE/ETHNICITY
compared with whites of
similar characteristics,
Hispanic
minority homeownership
rates still fall short.
Black
The importance of educa-
White
tion to homeownership
AGE
progress has increased as
Under 35
employment growth has
shifted toward professional,
technical, and managerial
35 to 44
jobs on the one hand, and
non-union, low-skill service
45 to 54
jobs on the other. As a
result, each successive edu-
55 to 64
cational degree commands
a larger return.
65 and
Over
16
INCOME
Compared with male full-
Less than
Median Income
time workers aged 25 to 34
without high school diplomas, males with high
More than
Median Income
school diplomas earn 60
percent more, those with
0
10
1994
20
30
40
50
60
70
80
90
1998
Sources: Census Bureau Series H-111 and Joint Center tabulations of the 1994 and
1998 Current Population Surveys.
bachelor’s degrees earn 2.3
times more, and those with
graduate degrees earn 3.0
times more. Indeed, the disparity
in earning power between full-time
the native-born Hispanic popula-
that similar progress in closing the
workers with and without high
tion jumped from 46 percent to
homeownership gap made during
school diplomas widened from 47
51 percent.
previous expansions was later
percent to 60 percent between
erased when the economy went
1987 and 1997.
Education Is Key
into a downturn.
Although minority households are
Minorities have lower homeowner-
will be especially difficult because
making advances, their homeown-
ship rates in part because they have
far fewer minorities than whites
ership rates are still less than two-
lower average incomes and wealth,
manage to earn high school or col-
thirds those of whites (Fig. 17). In
different living arrangements and
lege degrees. Fully 38 percent of
addition, it is important to note
age distributions, and higher immi-
Hispanics between the ages of 25
Closing the homeownership gap
17
Minorities Are Making Limited Progress in
Closing Persistent Homeownership Gaps
Minority Rates as Shares of Non-Hispanic White Rate
their bachelor’s degrees. Indeed,
young college-educated black
70
BLACK
males working full time had medi-
HISPANIC
an earnings of only $27,000 in
60
1997, compared with $36,000 for
50
their white counterparts. Among
35 to 44 year-olds, median earn-
40
ings for black male full-time work30
ers with bachelor’s degrees were
$35,000 in 1997 — some $15,000
20
below those for white male workers.
10
Lagging Central City Rates
0
1994
1995
1996
1997
1998
1994
1995
1996
1997
1998
Homeownership gains have largely
Source: Census Bureau Series H-111.
bypassed the nation’s central cities.
According to preliminary results
and 34 lack a high school diploma,
In large measure, this disparity
from the 1997 American Housing
compared with only 12 percent of
reflects the much lower returns
Survey (using 1980 census defini-
blacks and 7 percent of whites.
that black male workers receive for
tions of metropolitan areas),
Similarly, only 8 percent of young
Hispanic adults have a bachelor’s
degree, compared with 12 percent
of blacks and 25 percent of whites.
18
A Bachelor’s Degree Gives a Major Lift to the
Ownership Prospects of Young Minorities
Ownership Rates (Percent)
Educational attainment among
Hispanics is so much lower in part
90
because many Hispanic immigrants
80
arrive in this country without a
CENTRAL CITY
SUBURB
70
high school diploma.
60
For minorities in particular, earn-
50
ing a college degree dramatically
40
improves the likelihood of becom-
30
ing a homeowner. Even so, the
20
homeownership rates of young
10
married minorities with bachelor’s
degrees still lag those of whites
with just a high school diploma
(Fig. 18). This holds for suburban
as well as central city residents.
0
White
Black
Hispanic
Less than High School Diploma
Bachelor’s Degree Only
White
Black
Hispanic
High School Diploma Only
Notes: Includes only married-couple households under age 45. Data was averaged
over 1996, 1997, and 1998 to increase sample size.
Source: Joint Center tabulations of the Current Population Survey.
17
suburban areas added nearly 3.6
19
million homeowners and non-
lion between 1991 and 1997, while
suburban homeownership rate rose
from 71 percent to 73 percent and
the nonmetropolitan rate from 73
percent to 75 percent. The central
Ownership Rate
Up 3.6 Points
Ownership Rate
Up 0.6 Point
Northeast
Midwest
South
Ownership Rate
Down 0.1 Point
300
Thousands of Households
520,000. Over this same period, the
Ownership Rate
Down 2.9 Points
400
metropolitan areas about 1.6 mil-
central cities added only about
City Homeownership Rates Reflect the Shifting
Balance Between Owner and Renter Growth
200
100
0
-100
city rate, in contrast, edged up less
than half a percentage point to just
49 percent.
-200
-300
Change in Number of Owners
In the Northeast, central cities
West
Change in Number of Renters
Source: Joint Center tabulations of the 1991 and 1997 American Housing Surveys.
both lost owner households and
saw a drop in homeownership
rates (Fig. 19). Although central
18
cities in the West added over
1997. Two-thirds of loans to minor-
West is now on par with the share
300,000 homeowners, the overall
ities in Southern metropolitan
of suburban owners of any race liv-
ownership rate fell in the region
areas were made in the suburbs; in
ing in those regions in 1990.
because an even larger number of
Miami, Atlanta, and Washington,
Similarly, even though low-income
renters were added. While Mid-
DC, the share exceeded 75 percent
families have traditionally been
western cities posted only modest
(Table A-6). Meanwhile, the share of
underrepresented among suburban
increases in the number of owners,
loans to low-income buyers made in
owners, the share of these house-
homeownership rates were up
the suburbs of Atlanta, Cincinnati,
holds buying in the suburbs in
sharply because the number of city
Detroit, Hartford, Miami, New York,
1997 approached that of owners
renters fell. Meanwhile, homeown-
Pittsburgh, St. Louis, and Washing-
of all income groups living there
ership rates in Southern central
ton, DC was also over 75 percent.
seven years earlier. In the South,
the share of low-income house-
cities inched higher with the addition of about 160,000 owners.
In all regions, the share of minori-
holds buying in the suburbs actual-
ty buyers purchasing
Minority and Low-Income Buyers
homes in the suburbs
ly exceeded that of all
In all regions,
now exceeds the
the share of
Large and growing shares of both
share of minority
minority buyers
minority and low-income house-
owners living in such
holds are buying homes in the sub-
neighborhoods in
urbs. Fully 60 percent of minority
1990. Indeed, the
buyers and 66 percent of low-
share of minority
income buyers within metropolitan
suburban homebuy-
areas purchased suburban homes in
ers in the South and
purchasing homes
in the suburbs
now exceeds the
share of minority
owners living in
such neighborhoods in 1990.
owners residing there
in 1990.
The growing concentration of low-income and
minority owners in the
suburbs does not necessarily mean, however,
that more of these
households are buying into higher-
purchasing homes in low-income
With house prices rising faster
income or less-segregated commu-
neighborhoods was consistently
than the incomes of the bottom
nities. Many older suburbs have
below eight percent.
third of households, it has become
increasingly difficult for these fam-
attributes more often associated
with central cities, such as high
Escalating House Prices
ilies to save enough to buy a home.
In inflation-adjusted dollars, the
concentrations of poor and minority households. Thus, while two-
As measured by the Freddie Mac
amount of money required to
thirds of low-income buyers pur-
Repeat Sales Index and adjusted
make a 10 percent downpayment
chased homes in suburban areas in
for overall inflation, house prices
on a typical home increased from
1997, only one-third bought in
rose eight percent between 1993
$11,560 in 1978, to $12,000 in
neighborhoods where the median
and 1998. Last year alone, house
1988, to $12,450 in 1998.
income was at least equal to the
prices were up by
metro area median.
more than four percent in nearly a quar-
Meanwhile, roughly three-quarters
ter of the states.
of higher-income buyers (with
incomes at least 20 percent above
area medians) are also choosing to
live outside central cities. Of the
The pressure of
Flexible Underwriting
rising home
prices has been
The pressure of rising
offset to some
home prices has been
House price inflation
extent by expand-
offset to some extent by
has been particularly
ed access to
expanded access to low-
strong on the West
low-downpayment
loans.
downpayment loans.
According to a Federal
eight largest metropolitan areas
Coast, topping seven
in each region, Atlanta, Buffalo,
percent in Seattle, San
Housing Finance Board
Detroit, Pittsburgh, Rochester, and
Francisco, San Diego,
survey, the share of
St. Louis have had the least success
and Los Angeles. Massachusetts and
loans with downpayments of five
attracting higher-income home-
New Hampshire have also seen
percent or less (excluding those
buyers to their central cities. Less
notable advances, caused in large
that are government-insured) in-
than 10 percent of upper-income
part by the more than five-percent
creased from one percent in 1985,
buyers purchased homes in such
increase in metropolitan Boston
to three percent in 1990, to seven
neighborhoods in 1997. The places
housing prices.
percent in 1998. Some lenders are
even experimenting with no-down-
that were most successful in attracting higher-income homeowners are
In the Mountain states, though,
payment loans. Lenders have also
a mix of amenity-rich cities with
home price inflation slowed in
relaxed other standards, such as
high home prices (such as San
1998 after exceeding the national
debt-to-income ratios, cash reserve
Francisco) and central cities that
average rate for the preceding five
requirements, and documentation
include large suburban-like areas
years. Similarly, home price infla-
of credit history.
(such as Phoenix and San Antonio).
tion in the Great Lakes region
(with the exception of Michigan)
Research conducted by Freddie
Cities had an even harder time
has also retreated from previously
Mac and other industry partners
drawing upper-income homebuyers
strong gains. Hawaii is the only
reveals, however, that delinquen-
to low-income neighborhoods. In
state where house price increases
cies and defaults mount when sev-
the 32 metropolitan areas analyzed,
failed to keep pace with general
eral underwriting standards are
the share of upper-income buyers
price inflation.
eased simultaneously. Even in the
19
absence of multiple risk factors,
20
Most of the 39 Largest Metros Have Avoided
Major Sustained House Price Declines
Number of Metropolitan Areas
low-downpayment loans pose legitimate concerns for lenders because
losses than loans with a larger equity cushion. In fact, if forced to sell
immediately, borrowers with fivepercent downpayment loans would
not have enough equity to cover
average selling costs.
With weaker performance of
affordable loans even in the midst
None
Number of Periods of Major Price Decline
they are known to trigger greater
One
Two
Three
Four
Five
0
5
10
15
20
25
of a booming economy, liberal
underwriting practices have raised
Note: Major sustained house price decline defined as a nominal house price drop
of five percent or more over a three-year period, measured between 1975 and 1998.
concerns over what might happen
Source: Table A-3.
when prices turn down or unemployment rises. House price
20
declines sizable enough to wipe
become delinquent and ultimately
homeownership rate in the decade
out home equity of five percent,
default on their loans.
ahead. Minorities will, however,
have a difficult time catching up
however, are relatively rare events
at the metropolitan level. Over the
Low-downpayment loans are also
with rates achieved by whites
period 1975 to 1998, two-thirds of
no panacea for affordability. While
because of their lower levels of
the nation’s 39 largest metropoli-
easing wealth constraints, low-
education, income, and wealth,
tan areas experienced no three-year
downpayment loans actually wors-
and because their younger age
intervals when nominal prices fell
en income constraints by adding
structure and family characteristics
five percent or more (Fig. 20).
to the size of loans. In addition,
are less conducive to homeowner-
they require payment of mortgage
ship. Indeed, the gap between
Even in the other 14 metropolitan
insurance, which adds half of a
minority and white ownership
areas, the risk of buying during
percentage point or more to inter-
rates has barely narrowed even in
such a period of sustained price
est rates. As a result, below-market
the best of times.
declines was relatively low: 10 per-
interest rate programs (such as
cent or less in eight metropolitan
mortgage revenue bonds) that can
Nevertheless, minorities should
areas and under 20 percent in
be used in tandem with low-down-
make up a growing share of home-
another five. The only metropolitan
payment loans are vital to the
owners. Not only do minorities
area where the risk exceeded 20
future growth of homeownership.
represent an increasing share of all
households and therefore of poten-
percent was Hartford, CT. Still,
when combined with job losses,
Homeownership Prospects
tial owners, but they will also be
reaching their peak homebuying
even modest price declines can easily force homeowners without cash
The aging of the US population
reserves and with little equity to
favors increases in the national
years during the next decade.
Rental Housing
Even if homeownership rates by age
the pace in the Northeast and West
income gains over the past two
and household type continue to
in 1997. Nevertheless, inflation-
years. The median income of renter
rise at the pace set over the 1990s,
adjusted contract rents in all four
households rose just 0.3 percent
about 30 percent of US households
regions remain below their previ-
between 1996 and 1998 while rents
will still rent their homes in 2010.
ous peaks (Fig. 21). Rent increases
climbed by 1.6 percent. For renters
Some families rent simply because
are now outpacing inflation in all
earning the median income and
they cannot afford to buy. For oth-
23 metropolitan areas (within the
living in typical units, then, hous-
ers, though, renting is an attractive
contiguous US) tracked by the
ing has become less affordable.
alternative to owning. In fact,
Consumer Price Index. Real gains,
Nationally, renter households
many households of all income
however, are modest in most
devoted 27.7 percent of their
levels — particularly those who are
places, with rent levels reaching
incomes to housing last year, up
changing job locations, are in the
record highs in just 5 of the 23
slightly from 27.4 percent in 1996.
process of divorce, or are in some
areas: Portland (up 12 percent
other life transition — prefer the
since 1990), Chicago (up 6 per-
Even consistently declining real
flexibility that renting allows.
cent), San Francisco (up 6 percent),
rents between 1987 and 1996
Seattle (up 6 percent), and New
failed to reverse the rapid run-up
York (up 2 percent).
in cost burdens that occurred in
Rent Increases
the early and mid-1980s. Because
Rents in the South and Midwest
Though meager overall, rent
of sluggish income growth, renters
started to rise faster than overall
increases have nonetheless out-
thus pay more for their housing
inflation in 1994, and picked up
stripped even smaller renter
today than they did for comparable units in the 1970s (Table A-7).
21
Although Rents Are Rising, They Still
Remain Below 1980s Peaks
Demand Shifts
Rising homeownership rates,
600
together with the passage of the
baby boomers into their late 30s
Contract Rents (1998 Dollars)
550
through early 50s, have held
500
growth in the number of renter
households to only 2.0 percent
450
since the economic expansion
400
began in 1991.
350
Nevertheless, rental demand has
been relatively strong in the West,
300
1980
1985
Northeast
Midwest
1990
South
1995
1998
West
Notes: Median rents from the AHS were adjusted by the BLS Residential Rent
Price Index. Data before 1987 were adjusted separately for depreciation.
Sources: Joint Center tabulations of the 1977 American Housing Survey; Bureau
of Labor Statistics’ Residential Rent Price Index.
with the number of renter households up 7 percent over this period.
The region’s recovering economy,
relatively young population, and
steady influx of the foreign-born
21
In the 1990s,
have all contributed to the growth
while the minority
in renters. Meanwhile, record-high
share jumped from
rents in some of the major metro
33 percent to a
areas in the Midwest, together
record 38 percent.
with especially affordable home-
the number of
both lower- and
higher-income
renters has
added between 1991
and 1997 had incomes
increased while
that are 20 percent or
that of middle-
more above regional
buying markets, have pushed the
In the late 1980s,
income renters
medians. In 1995 (the
renter population in that region
households in all
has declined.
last year for which local
down four percent.
income groups
income comparisons are
joined the ranks of
possible), more than six
Growth in the number of renter
renters. In the 1990s, however, the
million renter households earned
households has been strongest in
number of both lower- and higher-
incomes that exceeded the local
locations where immigration is
income renters has increased while
area median by at least 20 percent.
most concentrated. Despite their
that of middle-income renters has
In fact, nearly 3.5 million of these
homeownership gains, immigrants
declined (Fig. 22).
renter households had incomes
and minorities make up a growing
22
of a million renters
that topped area medians by 50
share of renters. Between 1990 and
Although households in the lowest-
percent or more.
1998, the foreign-born share of
income brackets are responsible for
renter household heads increased
most of the absolute growth in the
These highest-income renters tend
from 13 percent to 16 percent,
number of renters, about a quarter
to be younger singles and those
who are ending marriages or are
divorced. While only 21 percent of
Change in Renters (Thousands)
22
high-earning households under age
Very Low-Income Households Account for Most
of the Growth in Renters
45 are renters, 33 percent of the
divorced, 43 percent of the recent-
1,400
ly separated, and 49 percent of the
1,200
never married in this age group
1,000
rent their housing. Among upperincome households over age 45,
800
rentership rates are 23 percent for
600
the never married and 21 percent
400
for the divorced.
200
Like the rest of the renter popula-
0
tion, upper-income renters are
-200
highly mobile. Half of these house-
-400
Very Low
Income
1985 to 1991
Low
Income
Moderate
Income
Moderate-High
Income
High
Income
1991 to 1997
holds report having lived in their
homes for one year or less. By
comparison, half of all homeown-
Notes: Very low income defined as less than 50% of regional median incomes; low is
between 50% and 80%; moderate is between 80% and 100%; moderate-high is between
100% and 120%; high is above 120%.
Source: Joint Center tabulations of the 1986, 1992, and 1998 Current Population
Surveys.
ers with comparable incomes have
remained in their homes for seven
years or more.
For highly mobile households,
23
renting can make more financial
450
sense than owning. In general,
400
including the ability to lock into
payments based on current house
prices, build equity by paying
down the loan, and gain from the
Thousands of Permits
the advantages of owning —
350
300
250
200
long-term rise in house prices —
150
increase with the length of occu-
100
pancy. Nonetheless, surprisingly
large shares of homeowners move
within just a few years of buying.
Multifamily Construction Has Heated Up
Particularly in the South
50
0
1980
1985
Northeast
Analysis of the American Housing
1990
Midwest
South
1995
1998
West
Source: Census Bureau Series C-40.
Survey indicates that 20 percent
of owners who purchased homes
in 1985 (when home prices were
ty owners are individuals or mar-
the West and the Northeast has
generally on the rise) moved with-
ried couples — most of whom own
increased modestly in the past two
in three years, 35 percent moved
less than five units.
years, while activity in the
Midwest has declined slightly.
within five years, and over 70 percent moved within ten years. Even
Moreover, a large and growing
among those who bought in 1989
share of the nation’s rental hous-
Even though multifamily produc-
(when prices were generally weak-
ing stock is now located outside
tion has rebounded somewhat
ening and homeowners had
central cities. In 1997, 54 percent
from its recession lows, construc-
a disincentive to sell), 16 percent
of rental units were in suburban or
tion of affordable units has not
moved within three years and 28
nonmetropolitan areas. Indeed, 68
kept pace with demand. In fact,
percent moved within five. For
percent of the new rental housing
the number of low-cost units
these homeowners, renting may
construction that took place
produced under the Low Income
well have been a more sound
between 1994 and
financial choice.
1997 occurred outside central city
Rental Housing Characteristics
boundaries.
Contrary to popular notions, fully
Mirroring population
one-third of the nation’s 34 million
growth, the South
rental units are single-family homes,
has been adding
and only about one-sixth are located in multifamily structures with 20
or more units. In addition, about
two-thirds of private rental proper-
Tax Credit program has
Contrary to
popular perceptions, one-third
of the nation’s
actually dropped
because the program
has not received an
34 million rental
inflation adjustment
units are single-
since 1986.
family homes,
and only about
Because of the lack of
rental housing at the
one-sixth are
incentives to build at
fastest clip (Fig. 23).
located in large
the low end of the mar-
Production of multi-
multifamily
ket and the strengthen-
family units in both
structures.
ing of demand at the
23
24
The Baby Boomers and the Echo Boomers Will
Bolster the Ranks of Renters
Change in Renters by Age Group, 2000-2010
age 50 to 64. The fastest-growing
market segments will therefore be
800
20-24
600
50-54
25-29
55-59
young adults with modest incomes
60-64
(many of them minorities) who are
Thousands of Renters
400
45-49
200
forming households for the first
65-69
time, and older, higher-income
15-19
households who choose to rent
0
70-74
-200
75+
rather than own for a variety of
lifestyle reasons.
-400
30-34
-600
After a decade of tepid growth,
40-44
-800
the opportunities are expanding
35-39
-1,000
for rental housing providers who
can fill these niche markets. New
Source: Joint Center projections.
rental housing construction is,
however, likely to focus even more
24
high end, rental housing produc-
as the echo boomers begin to form
on the high end of the market,
tion has shifted toward more
independent households. Conse-
particularly in suburban locations.
expensive units. Between 1990
quently, more new renter house-
In the absence of additional gov-
and 1997, the median
holds will be added to
ernment subsidies, meeting the
the 20 to 30 year-old
housing demand of low-income
family housing units
Because of the
age range than in the
renters through new construction
increased by nearly
lack of incen-
past 10 years (Fig. 24).
will remain difficult.
100 square feet and
tives to build at
size of new multi-
the low end and
the share with two
strengthening
bedrooms rose from
65 percent to 71 percent. At the same
demand at the
high end, multifamily production
time, the median ask-
has shifted
ing rents in apart-
Minorities, immigrants,
and second-generation
Rising real rents and the shift in
Americans will continue
demand at the margin to higher-
to make up growing
income tenants will also restore
shares of these new
incentives for owners to improve
renter households.
their rental properties. Some
upgrading of lower-cost units to
toward more
At the same time, the
appeal to more affluent renters is
five or more units,
number of renters
therefore likely. Like new construc-
after adjusting for
between the ages of
tion, the remodeling of rental
ment buildings with
expensive units.
inflation, saw a striking 16 percent
30 and 44 will decline with the
units to accommodate low-income
increase from $645 in 1994 to
aging of the baby-bust generation.
tenants will depend on scarce fed-
$724 in 1997.
Although the postwar baby-boom
eral subsidies.
generation will be in the age
Rental Housing Prospects
groups when homeownership is
highest, the sheer size of this gen-
Over the next decade, the number
eration will mean considerable
of renters should increase sharply
growth in the number of renters
Low-Income Housing
The booming economy has done lit-
in theory these owners should ben-
comparison impossible, the num-
tle to relieve the chronic housing
efit from the drop in mortgage
ber of severely burdened house-
problems of low-income house-
interest rates, in practice their low
holds probably did increase between
holds. The supply of low-cost
incomes often make it difficult for
1995 and 1997. Over this period,
unsubsidized rental units continues
them to refinance their home loans.
incomes for renters in the bottom
quarter of the income distribution
to dwindle as rent increases outpace
growth in renter median incomes.
Indeed, the number of units afford-
Housing Affordability and
Structural Adequacy
fell 2.9 percent and costs for units
in the bottom quarter of the rent
distribution rose 4.5 percent.
able (at 30 percent of income) to
extremely low-income households
Despite the long economic recov-
fell from 1.9 million in 1991 to 1.5
ery, the number of unsubsidized,
Severe payment burdens are most
million in 1995. The stock of subsi-
very low-income renters (incomes
prevalent among the 5.8 million
dized housing units is also shrink-
below 50 percent of area median)
unsubsidized renters with extreme-
ing as property owners increasingly
paying more than half their
ly low incomes (less than 30 per-
opt out of federal subsidy programs
incomes for housing was virtually
cent of area median). Almost 3.9
in search of higher returns.
unchanged between 1993 and
million of these households spent
1995. Although changes in the
more than half their incomes on
Low-income homeowners face sig-
primary data source used to track
rent in 1995 (Table A-9). Of those
nificant cost burdens as well. While
these trends make a more recent
who reported utility costs separately from their rents, over one in
four paid 25 percent or more of
25
Severe Housing Problems Are as Prevalent in
the Suburbs as in the Central Cities
CENTRAL CITY
SUBURB
NONMETRO
3.0
their incomes for utilities alone.
Although affordability has become
the predominant housing issue,
problems of structural inadequacy
2.5
Millions of Households
and overcrowding still affect a significant number of US households.
2.0
In 1995, HUD classified 2.0 million
1.5
housing units as seriously inadequate. In addition, 2.8 million
1.0
households lived in units housing
more than one person per room.
0.5
Among households living in unsub-
0.0
Renters
Owners
Renters
Owners
Renters
Owners
Severely Burdened
Severely Burdened and Living in Severely Inadequate Units
Living in Severely Inadequate Units
Notes: Very low income is less than 50% of area median. Severely burdened
defined as households paying 50% or more of their incomes for gross rent.
Severely inadequate defined as having severe problems in plumbing, heating,
electrical systems, upkeep or hallways. Renter households exclude units
that are federally subsidized.
Source:
Joint Center tabulations of the 1995 American Housing Survey.
sidized units, very low-income
renters in central cities most commonly face severe housing problems. As of 1995, over 2.7 million
(53 percent) of these households
paid half their incomes for gross
25
At current rents,
a full-time work-
rent or lived in severely inadequate
households are nearly
units. But both owners and renters
twice as likely as the
in the suburbs also make up a
general population to
substantial share of households
live in substandard
suffering from severe housing
conditions. According
do not earn enough to
problems. In fact, the number of
to the 1990 Census,
afford decent housing.
households in the suburbs living
28 percent of Native Americans on
A recent compilation of studies by
in these conditions equals that in
tribal lands either lived in over-
the Center on Budget and Policy
central cities, but a larger share
crowded housing or lacked complete
Priorities found that former welfare
are homeowners (Fig. 25). Even
kitchen and plumbing facilities.
recipients typically earn less than
er earning $7.00
per hour cannot
afford a modest
two-bedroom unit.
though the number of households
lower in nonmetropolitan areas
26
tion to work, there is
no doubt that many
who are now employed
$8.00 per hour, and many earn less
Impacts of Welfare Reform
with severe housing difficulties is
have made the transi-
than $6.00 per hour. Assuming
take-home pay of $7.00 per hour
than elsewhere, the incidence (on
Welfare reform has had its greatest
and full-time work (40 hours per
a percentage basis) of severely
impact on the renter population.
week, 52 weeks per year), a single
inadequate housing is considerably
While only a third of US house-
earner could not pay the rent on
higher in these locations.
holds rent their homes, 80 percent
an average, modest two-bedroom
of those reporting receipt of public
unit anywhere in the US without
While minorities in general are
assistance (TANF and general relief)
incurring a significant cost burden.
more likely to experience housing
in 1998 are renters.
problems, the difficulties of Native
In fact, at current rent levels in
Americans in particular are often
Although it is still unclear how
eight states, at least two people in
overlooked. Native American
many former welfare recipients
each household would have to be
employed at $7.00 per hour to
earn enough to pay the rent. Even
26
Welfare Reform Could Affect Over One Million
Households Who Receive Housing Assistance
Number of Households Receiving Assistance in 1998
this estimate is very optimistic,
given that many workers are not
full time and have periods of
unemployment throughout the
year. Moreover, over half (57 percent) of non-elderly households
With Housing
Assistance
(3.7 Million)
With Income
Assistance
(2.2 Million)
receiving welfare in 1998 contained only one adult.
Also troubling is the fact that
about 1.1 million renters (almost
With Both
(1.1 Million)
16 percent) receiving housing assistance in 1995 also received income
assistance (Fig. 26). As a result, the
Notes: Income assistance includes payments such as TANF and general assistance.
Housing assistance includes Public Housing and other government rent subsidies.
federal housing budget may have
Source: Joint Center tabulations of the 1998 Current Population Survey.
to pick up more of the difference
Annual Change in Units (Thousands)
27
After Years of Growth, The Number of Rentals
Receiving Direct Federal Subsidies Has Fallen
ment. The other 3.1 million subsi-
350
dies are tied to specific units —
300
roughly 45 percent of which are in
public housing and the balance in
250
privately owned buildings.
200
150
Years of neglect have led to a seri-
100
ous backlog of repairs among the
50
1.1 million assisted and 350,000
unassisted units insured by HUD.
0
An Abt Associates study estimates
-50
that restoring systems in these
-100
1977
1982
1987
1992
1998
Fiscal Year
buildings to their original working
condition would have cost $4.2 bil-
Note: HUD rent subsidy programs include Public Housing, Section 8, Section 236 and
rent supplements.
lion in 1995, up from $2.2 billion
Source: Congressional Budget Office in HUD’s “Waiting in Vain,” March 1999.
in 1989. The price tag for repairing
a typical two-bedroom unit would
be $2,800 in newer assisted proper-
between the rents and 30 percent
est number of new units was
ties and $3,845 in older properties
of the incomes of former recipients
approved in 1999 and is likely to
(Fig. 28). An estimated fifth of these
who earn less than they collected
increase in the next budget, it is
costs relate to repairs to systems
on welfare. The hope remains,
far below the amount required to
essential to health and safety.
however, that welfare reform will
meet the housing needs of the
start former recipients on a path of
large and apparently growing num-
On top of losses due to neglect and
rising wages that will ultimately
ber of severely burdened renters.
demolition, increasing numbers of
give them more housing choices
subsidized units may be lost as
and reduce the need for federal
The federal government directly
property owners convert their units
housing assistance.
subsidizes about 4.5 million units
to market-priced rentals. In 1998
to ensure that no
Loss of Assisted Units
alone, the nation lost
renter has to pay
Increasing
17,000 subsidized units
more than 30 per-
numbers of
as owners opted out of
Along with the number of low-cost
cent of income on
subsidized units
federal programs, bring-
unsubsidized units, the stock of
housing, unless by
may be lost
ing total losses since late
choice. Of these sub-
as property
1996 to 30,000.
subsidized housing has also dwindled. After slowing drastically in
sidies, 1.4 million
owners convert
the 1980s and early 1990s, growth
allow recipients to
their properties
During the next five
rent any unit that
to market-priced
years, contracts on two-
in the number of rental units
rentals.
receiving HUD subsidies turned
meets minimum fed-
negative between 1995 and 1998,
eral standards where
with the loss totaling 65,000 units
the landlord agrees to accept par-
14,000 properties and 1 million
(Fig. 27). While funding for a mod-
tial rent payment from the govern-
apartments — are set to expire.
thirds of all Section 8
units — involving
27
Retaining older
subsidized units
Forty-four states thus stand to lose
able stock. The barri-
in the affordable
grams in areas where
more than half the affordable units
ers to success, how-
stock is
they can earn higher
subsidized through Section 8.
ever, are formidable.
becoming even
First, hot rental mar-
more difficult.
market rents. And
fourth, HUD has
While the government promises
kets in many cities
heightened enforce-
“portable” rental vouchers to the
are making the conversion to mar-
ment against owners of substan-
low-income residents of these
ket rates increasingly attractive.
dard units. While this crackdown is
units, vouchers in many cases will
Second, the duration of Section 8
not intended to frighten landlords
not cover the difference between
contract renewals is now just one
already in compliance, it has raised
30 percent of income and rents
year, increasing the share of own-
concerns among some property
that are above “fair market” levels.
ers that can opt out annually and
owners that relatively minor prob-
Significant rent hikes will force
adding to the uncertainty property
lems may land them in court. This
tenants either to take on high rent
owners feel about keeping their
fear, in turn, has reduced land-
burdens or to move.
units affordable for extended peri-
lords’ willingness to partner with a
ods of time.
government agency.
to use vouchers to cover the higher
Third, low federal caps on subsi-
Even as it stands, finding enough
rents and is working to retain these
dized rents discourage owners from
property owners to participate in
older assisted units in the afford-
participating in the subsidy pro-
federal housing programs is difficult
HUD is now requesting authority
28
in some areas. After waiting years
to obtain a subsidy, many families
28
The Repair Needs of FHA-Insured Multifamily
Rentals Are Growing
1998 Dollars
rental vouchers because they cannot find a landlord that is willing
to take them.
4,500
4,000
Average Cost of Repairs Per Unit
ultimately have to return their
Very Low-Income Homeowners
3,500
3,000
Some 45 percent of very low-
2,500
income households are homeown-
2,000
ers. Over half of these households
are headed by females or include
1,500
at least one elderly member. In
1,000
addition, nearly one quarter are
500
headed by minorities (Fig. 29).
0
All Properties
Needs as of 1989
Unassisted
Newer Assisted
Older Assisted
Needs as of 1995
Notes: Based on repairs to two-bedroom equivalent. Includes most properties insured
before 1990 and still insured (or held) in 1995. Unassisted includes units with
FHA insurance but no rent subsidies.
Source: Abt Associates, “Status of HUD-insured (or Held) Multifamily Rental
Housing,” September 1998.
Unlike very low-income renters,
who tend to live in central cities,
very low-income homeowners are
more often found in suburban
neighborhoods (47 percent) and
nonmetropolitan areas (27 percent).
29
Over Half of Very Low-Income Owner Households
Include An Elderly Member
Household Types as a Percent of Owner Households in 1995
Low-Income Housing Prospects
Households with
Elderly Member
Barring unprecedented progress in
securing better-paid employment,
Single Elderly
Household Head
the only solution to the plight of
the nation’s 4.9 million severely
Households with
Disabled Member
cost-burdened renters is some form
Disabled Elderly
Household Head
of housing subsidy or income support. For at least a decade, though,
Female
Household Head
federal policy has moved to contain
or curtail funding for such programs.
Minority
Household Head
0
10
Very Low Income
20
All Others
30
40
50
60
To make matters worse, the government recently shortened the
Notes: Very low-income defined as less than 50% of local area median. Elderly
is age 65 or over.
duration of contracts for project-
Sources: Joint Center tabulations of the 1995 American Housing Survey.
based rental assistance to just one
year. As the number of projects
with expiring contracts rises, the
Nearly 60 percent of very low-
income owners that are equity-rich
risk that property owners will stop
income homeowners pay more
but cash-poor. Low incomes often
participating in subsidy programs
than 30 percent of their incomes
prevent these home-
for housing, while 10 percent pay
owners from being
more than 50 percent. Faced with
able to refinance their
these high payment burdens, some
mortgages or qualify
poor owners defer basic upkeep. In
1995, only 74 percent reported per-
for home equity loans
also increases. As they
An estimated
do, the tens of thou-
1.1 million very
sands of renters who
low-income
face displacement will
homeowners lived
have difficulty finding
in substandard
or lines of credit.
housing in 1995.
forming routine maintenance with-
landlords willing to
accept vouchers in par-
in the preceding two years, and the
For seniors, reverse
amounts they spent were signifi-
mortgage products
cantly lower than those reported
that pay the owner an annuity that
Adding to the nation’s housing
by other homeowners. In fact, from
is later repaid upon sale of the
policy challenges, many properties
1984 to 1993, a million very low-
home may be a viable way to gen-
that still receive federal assistance
income owners spent less than $250
erate cash to cover healthcare
have been seriously undermain-
on home maintenance and/or
needs and necessary home modifi-
tained, threatening the health and
replacements each year on average.
cations. But even if they can get
safety of residents. Although there
As a result, an estimated 1.1 million
financing, many elderly owners
have been recent efforts to demol-
very low-income homeowners lived
hesitate to borrow against their
ish the most dilapidated housing
in substandard housing in 1995.
equity because they view their
projects and to make improve-
homes as a last protection against
ments to others, the need for
Making the necessary improve-
emergencies or because they fear
extensive rehabilitation of assisted
ments is difficult even for low-
fraud or abuse by lenders.
units is growing.
tial payment for rent.
29
Table A-1
Housing Market Indicators: 1975-1998
Permits 1
(Thousands)
30
Starts 1
(Thousands)
Size 2
(Median sq. ft.)
Year
Singlefamily
Multifamily
Singlefamily
Multifamily
Manufactured
Singlefamily
Multifamily
1975
1976
1977
1978
676
894
1,126
1,183
263
402
564
618
892
1,162
1,451
1,433
268
376
536
587
229
250
258
280
1,535
1,590
1,610
1,655
942
894
881
863
1979
1980
1981
1982
982
710
564
546
570
481
421
454
1,194
852
705
663
551
440
379
400
280
234
229
234
1,645
1,595
1,550
1,520
1983
1984
1985
1986
902
922
957
1,078
703
757
777
692
1,068
1,084
1,072
1,179
635
665
669
625
278
288
283
256
1987
1988
1989
1990
1,024
994
932
794
510
462
407
317
1,146
1,081
1,003
895
474
407
373
298
1991
1992
1993
1994
754
911
987
1,068
195
184
212
303
840
1,030
1,126
1,198
1995
1996
1997
1998
997
1,070
1,062
1,184
335
356
379
421
1,076
1,161
1,134
1,271
Sales Price of
Single-family Homes
(1998 dollars)
Residential Upkeep
and Improvement 6
(Millions of 1998 dollars)
Existing 5
Owneroccupied
Rental
For
Sale
For
Rent
139,930
143,735
152,303
163,626
101,254
103,376
107,869
115,639
56,485
64,687
68,969
73,984
24,726
24,159
21,487
26,966
1.2
1.2
1.2
1.0
6.0
5.6
5.2
5.0
893
915
930
925
171,766
170,188
167,781
161,786
118,718
115,815
111,222
107,992
77,436
78,730
67,951
63,139
26,566
24,207
25,533
23,034
1.2
1.4
1.4
1.5
5.4
5.4
5.0
5.3
1,565
1,605
1,605
1,660
893
871
882
876
158,592
158,166
154,638
157,821
107,278
106,974
108,602
114,009
65,517
73,155
76,969
85,846
24,445
36,321
44,624
49,899
1.5
1.7
1.7
1.6
5.7
5.9
6.5
7.3
239
224
203
195
1,755
1,810
1,850
1,905
920
940
940
955
160,412
159,776
158,568
153,272
117,653
120,032
121,528
119,101
83,356
90,173
82,602
78,927
51,643
49,151
50,021
54,234
1.7
1.6
1.8
1.7
7.7
7.7
7.4
7.2
174
170
162
258
174
212
243
286
1,890
1,920
1,945
1,940
980
985
1,005
1,015
149,046
146,596
148,456
151,688
116,554
116,293
115,453
115,755
74,096
81,162
82,213
89,900
42,623
39,356
39,958
36,618
1.7
1.5
1.4
1.5
7.4
7.4
7.3
7.4
278
316
340
345
311
320
297
333
1,920
1,950
1,975
2,000
1,040
1,030
1,050
1,020
151,692
150,094
151,725
153,183
116,354
117,641
119,917
124,500
84,049
83,183
86,634
86,336
35,402
36,205
33,782
30,050
1.6
1.6
1.6
1.7
7.6
7.9
7.8
7.9
New 4
Note: Manufactured housing starts defined as mobile home placements as reported by the US Bureau of the Census.
Price Index (CPI-UX) for All Items.
Sources: 1.
2.
3.
4.
5.
US Bureau of the Census, Construction Reports, Series
US Bureau of the Census, Construction Reports, Series
National Association of Realtors.
New home price is the 1990 national median home price
Existing home price is the 1990 median sales price of
Home Price Index from Freddie Mac.
6. US Bureau of the Census, Construction Reports, Series
change in survey in 1984.
7. US Bureau of the Census, Construction Reports, Series
8. US Bureau of the Census, Construction Reports, Series
Table A-2
All value series are defla
C-20.
C-25.
indexed by the Census Bureau’s Construction Reports C-25 Constant Quality
existing single-family homes determined by the National Association of Re
C-50. 1998 figures are estimated by the Joint Center for Housing Studies.
H-111.
C-30.
Households by Age and Family Type: 1990-2010
Total
Vacancy Rates 7
(Percent)
Thousands
1990
1995
Revised
1995
2000
2005
2010
92,257
98,262
99,202
104,731
110,390
116,342
5,049
19,841
20,518
14,420
12,379
11,549
8,501
4,801
18,855
22,898
17,812
12,492
11,963
9,441
4,843
19,028
23,107
17,971
12,606
12,070
9,577
4,944
17,433
24,096
21,323
14,482
11,713
10,740
5,398
16,971
22,802
23,735
18,000
11,951
11,533
5,704
17,848
20,859
24,869
21,426
13,745
11,891
23,112
23,808
27,500
7,477
10,360
24,932
24,787
28,545
8,734
11,264
25,198
25,011
28,810
8,813
11,370
27,421
25,828
30,640
9,193
11,649
29,733
25,834
33,245
9,327
12,251
32,052
25,699
36,221
9,463
12,907
Age of Head
Under 25 Years
25 to 34 Years
35 to 44 Years
45 to 54 Years
55 to 64 Years
65 to 74 Years
75 Years and Over
Family Type
Single Person
Married With Children
Married Without Children
Single Parent
Other Households
Notes: 1995 data are consistent with the 1990 Census. Revised 1995 data are consistent with the 1995 Current Population Survey.
Source: Masnick, McArdle, and Apgar, “US Household Trends: The 1990s and Beyond,” Joint Center for Housing Studies, 1996.
Table A-3
Value Put in Place 8
(Billions of 1998 dollars)
Large Metropolitan Areas Experiencing
Three-Year Nominal House Price Declines
of Five Percent or More: 1975-1998
Home Sales
(Thousands)
Singlefamily
Multifamily
Additions &
Alterations
New 2
Existing 3
91.1
126.8
161.7
166.9
20.6
20.0
26.1
29.4
47.0
50.7
51.6
55.7
549
646
819
817
2,476
3,064
3,650
3,986
Number of
Three-Year Periods
of Price Declines
Metro Area
One
Years of Decline
Start
End
Percent Decline
Denver
1986
1989
-5.5
Milwaukee
1979
1982
-6.4
Providence
1989
1992
-5.8
Boston
1988
1989
1991
1992
-8.5
-9.3
148.1
98.4
90.5
70.0
34.8
31.1
30.4
26.2
55.7
57.2
51.9
46.8
709
545
436
412
3,827
2,973
2,419
1,990
118.9
135.8
133.9
151.7
36.9
44.7
44.4
46.1
50.9
63.5
68.1
80.2
623
639
688
750
2,719
2,868
3,214
3,565
Detroit
162.6
159.6
153.7
138.4
36.2
30.5
29.3
24.5
77.8
81.0
75.4
69.9
671
676
650
534
3,526
3,594
3,346
3,211
1980
1981
1983
1984
-6.3
-8.4
New Orleans
1985
1986
1988
1989
-6.5
-8.3
San Francisco
120.5
144.1
157.1
173.8
19.1
16.2
12.7
15.9
59.1
72.2
78.4
80.2
509
610
666
670
3,220
3,520
3,802
3,946
1990
1991
1993
1994
-7.7
-5.1
San Diego
1991
1992
1994
1995
-7.4
-7.1
156.9
169.0
169.7
189.6
19.3
21.6
23.4
24.7
73.4
81.8
81.1
85.7
667
757
804
888
3,799
4,086
4,213
4,782
Dallas
1985
1986
1987
1988
1989
1990
-7.8
-12.3
-8.0
Sacramento
1991
1992
1993
1994
1995
1996
-10.3
-10.0
-7.4
Houston
1982
1983
1984
1985
1985
1986
1987
1988
-11.6
-16.2
-19.0
-11.2
Los Angeles
1990
1991
1992
1993
1993
1994
1995
1996
-9.2
-15.0
-16.2
-11.9
San Antonio
1984
1985
1986
1987
1987
1988
1989
1990
-7.1
-9.3
-16.1
-11.9
Hartford
1988
1989
1990
1991
1992
1991
1992
1993
1994
1995
-8.4
-10.5
-8.7
-8.2
-7.4
Two
Three
ted by the Bureau of Labor Statistics’ Consumer
Home Price Index.
altors, indexed by the Conventional Mortgage
Four
Owner-occupied series modified to account for
Appendix tables can be downloaded in
Microsoft Excel format from the Joint
Center for Housing Studies website at
www.gsd.harvard.edu/jcenter
The following tables are also available:
1. Housing Permits by State: 1995-1998, including
a comparison of 1998 levels to 1980s peaks.
2. Single- and Multifamily Housing Permits by
State: 1991-1998; Manufactured Housing
Placements by State: 1991-1997.
3. Households by Detailed Age and Family Type:
1990-2010.
4. Home Prices by Region and Metropolitan Area:
1991-1998.
5. Terms of Conventional Single-Family
Mortgages: 1975-1998.
6. Homeownership Rates by Race, Age, and Family
Type: 1983-1998.
Five
Note: Metropolitan areas are the primary named PMSA.
Source: Freddie Mac Weighted Repeat Sales Index.
31
Table A-4
Housing Production in High-Growth Metropolitan Areas and Counties:
1990-1997
Ranked by Total Permits (Thousands)
1990
1991
1992
1993
1994
1995
1996
1997
Total
Permits
1990-97
Total
1993
Population
Total
Permits per
1,000 People
Washington, DC
Los Angeles
Atlanta
41.8
68.3
27.2
31.9
40.8
24.1
42.4
35.0
28.7
43.8
28.2
35.7
45.2
35.7
41.2
40.9
28.8
48.3
42.4
32.6
48.3
42.1
39.6
49.8
330.5
308.9
303.2
6,978
15,200
3,229
47.4
20.3
93.9
Chicago
New York
Dallas
31.9
27.2
20.0
27.1
22.6
19.6
32.4
25.4
21.9
35.1
36.6
26.5
38.4
36.7
34.0
36.8
34.8
36.7
38.9
41.7
38.8
35.4
44.5
44.3
276.0
269.6
241.8
8,467
8,594
4,283
32.6
31.4
56.5
Phoenix
Las Vegas
Seattle
13.4
23.9
35.0
15.4
19.8
19.5
21.0
15.7
23.7
25.5
21.0
22.9
34.8
27.8
23.5
37.5
29.5
21.9
39.6
32.4
24.4
43.2
30.9
25.3
230.4
201.0
196.1
2,392
1,013
3,184
96.4
198.5
61.6
Miami
Detroit
Houston
21.6
19.6
13.3
14.0
16.4
15.6
17.1
18.1
16.7
22.0
19.3
17.3
27.0
23.4
22.5
27.6
24.0
21.7
21.0
26.7
24.1
22.9
24.9
32.3
173.2
172.4
163.5
3,351
5,246
4,030
51.7
32.9
40.6
San Francisco
Philadelphia
Portland, OR
21.9
17.7
18.3
17.7
15.2
12.6
16.8
17.7
14.0
15.1
20.1
16.2
18.0
20.1
18.9
15.7
17.7
20.4
21.4
19.5
21.6
26.5
22.0
22.3
153.2
150.1
144.3
6,470
5,941
1,945
23.7
25.3
74.2
Minneapolis
Orlando
Denver
15.6
21.0
6.2
14.2
15.3
8.1
18.5
14.3
13.9
19.3
16.6
17.0
17.6
16.7
20.6
17.8
16.0
21.4
18.2
16.1
21.5
16.7
21.4
24.8
137.9
137.5
133.5
2,655
1,335
2,148
51.9
103.0
62.2
Tampa
Boston
Charlotte
13.1
7.8
10.8
11.1
7.7
8.4
11.0
10.5
9.7
12.5
15.7
10.8
14.7
16.3
13.8
13.6
14.8
13.8
14.7
16.0
18.5
17.0
16.4
18.2
107.7
105.2
104.0
2,135
5,467
1,233
50.5
19.2
84.3
Maricopa, AZ
Clark, NV
Harris, TX
13.0
20.7
10.2
14.9
17.9
12.6
20.4
13.4
12.6
24.8
19.0
13.2
33.7
25.6
15.9
36.7
27.8
14.1
38.6
30.9
14.5
41.5
29.2
23.0
223.6
184.5
116.0
2,268
880
3,005
98.6
209.7
38.6
Broward, FL
Los Angeles, CA
Dallas, TX
10.7
25.1
8.8
6.5
15.9
8.2
8.7
12.0
8.8
13.0
7.4
11.2
15.7
7.8
12.7
12.9
7.8
15.1
14.4
7.7
13.2
13.0
9.8
14.5
95.0
93.5
92.5
1,351
9,135
1,928
70.3
10.2
48.0
King, WA
Dade, FL
Palm Beach, FL
15.8
10.9
9.9
7.3
7.5
7.5
9.3
8.3
8.3
7.9
9.0
8.9
8.3
11.3
11.6
8.2
14.7
10.3
10.3
6.6
10.0
11.8
10.0
9.0
78.8
78.2
75.5
1,577
2,001
932
50.0
39.1
81.0
Orange, CA
Orange, FL
Riverside, CA
12.0
9.6
15.4
6.6
9.0
9.3
5.8
6.9
8.2
6.3
8.3
7.3
12.6
9.2
8.0
8.2
9.7
6.8
10.2
8.7
7.5
12.3
11.4
9.7
74.0
72.8
72.2
2,516
728
1,321
29.4
100.0
54.7
Cook, IL
San Diego, CA
Wake, NC
9.5
15.7
4.2
6.2
7.9
4.6
7.8
6.1
5.8
8.5
5.8
7.0
9.0
6.9
10.1
8.9
6.6
8.9
9.6
6.8
9.2
9.4
11.1
10.1
68.8
67.0
59.8
5,142
2,611
476
13.4
25.7
125.6
Gwinnett, GA
Mecklenburg, NC
Tarrant, TX
4.0
6.1
4.9
4.4
4.3
5.0
5.9
5.1
5.1
7.8
6.0
6.0
8.3
8.2
7.4
9.8
7.7
8.9
9.5
10.4
9.5
9.3
10.3
10.1
59.1
58.2
56.8
413
549
1,235
143.1
106.1
46.0
Travis, TX
Collin, TX
Franklin, OH
1.8
4.3
6.9
2.8
3.8
5.9
4.9
4.8
6.7
7.0
5.6
7.1
8.7
8.5
7.3
9.8
7.0
6.8
11.8
8.5
7.3
9.4
11.6
6.2
56.0
54.2
54.0
631
308
999
88.7
175.9
54.0
5.5
13.3
6.2
4.4
6.8
3.8
4.7
7.3
3.9
5.2
5.8
5.1
7.5
4.8
7.8
7.1
3.9
8.9
8.9
4.8
8.1
9.1
5.4
8.1
52.5
52.1
52.0
865
1,546
677
60.6
33.7
76.8
Metropolitan Areas
Counties
32
Hillsborough, FL
San Bernardino, CA
Fulton, GA
Notes: Includes metropolitan areas with over 100,000 permits and counties with over 50,000 permits. Metropolitan areas are
CMSAs and MSAs with only the name of the principal central city given. Metropolitan areas are defined by the Office of
Management and Budget as of 1993. For New York and Boston, metropolitan area definitions are those in effect for the particular year, while population estimates are based on 1996 area definitions.
Sources: US Bureau of the Census, Construction Reports, Series C-40, and Metropolitan and County Population Estimates.
Table A-5
Population Growth in Large Cities and Their Surrounding Areas: 1990-1996
Thousands
Population
1990
Absolute Change
1990-96
1996
Annual Percent Change
1990-96
City Area
(Square Miles)
Central
City
Surrounding
Area
Central
City
Surrounding
Area
Central
City
Surrounding
Area
Central
City
Surrounding
Area
7,697
39,414
91,323
39,916
99,001
502
7,678
0.2
1.4
Atlanta
Baltimore
Boston
132
81
48
394
736
574
2,566
1,646
4,881
402
675
558
3,139
1,799
5,005
8
-61
-16
573
153
124
0.3
-1.4
-0.5
3.7
1.5
0.4
Buffalo
Charlotte
Chicago
41
174
227
328
420
2,784
861
742
5,456
311
441
2,721
864
880
5,879
-17
21
-63
3
138
423
-0.9
0.8
-0.4
0.1
3.1
1.3
Cincinnati
Cleveland/Akron
Columbus
77
139
191
364
729
633
1,454
2,131
712
346
715
657
1,575
2,198
791
-18
-14
24
121
67
79
-0.8
-0.3
0.6
1.4
0.5
1.8
Dallas
Denver/Aurora
Detroit
716
286
139
1,716
690
1,028
2,321
1,290
4,159
1,828
750
1,000
2,747
1,527
4,284
112
60
-28
426
237
125
1.1
1.4
-0.5
3.1
3.1
0.5
Hartford
Houston
Indianapolis
17
540
362
140
1,639
731
1,018
2,092
649
133
1,744
747
1,012
2,509
745
-7
105
16
-6
417
96
-0.8
1.1
0.4
-0.1
3.3
2.5
Kansas City
Los Angeles
Miami
312
668
36
435
4,702
359
1,148
9,830
2,834
441
4,822
365
1,249
10,673
3,149
6
120
6
101
843
315
0.2
0.4
0.3
1.5
1.4
1.9
Milwaukee
Minneapolis/St. Paul
New Orleans
96
108
181
628
641
497
979
1,898
788
591
618
477
1,052
2,147
836
-37
-23
-20
73
249
48
-1.0
-0.6
-0.7
1.2
2.2
1.0
New York
Norfolk
Orlando
348
302
67
7,826
654
165
11,724
791
1,060
7,878
664
174
12,060
876
1,243
52
10
9
336
85
183
0.1
0.3
0.9
0.5
1.8
2.9
Philadelphia
Phoenix/Mesa
Pittsburgh
135
529
56
1,586
1,273
370
4,307
965
2,025
1,478
1,504
350
4,495
1,243
2,029
-108
231
-20
188
276
4
-1.1
3.0
-0.9
0.7
4.8
0.0
Portland, OR
Providence
Rochester, NY
125
19
36
464
161
230
1,329
973
832
481
153
222
1,597
971
866
17
-8
-8
268
-2
34
0.6
-0.8
-0.6
3.4
0.0
0.7
Sacramento
Salt Lake City
San Antonio
96
109
333
369
160
959
1,112
912
366
376
173
1,068
1,256
1,045
422
7
13
109
144
133
56
0.3
1.4
1.9
2.2
2.4
2.6
San Diego
San Francisco
Seattle
324
274
84
1,111
1,878
516
1,387
4,372
2,454
1,171
1,941
525
1,484
4,664
2,796
60
63
9
97
292
342
0.9
0.6
0.3
1.2
1.1
2.3
St. Louis
Tampa/St. Petersburg
Washington, DC
62
168
61
397
520
607
2,095
1,548
3,616
352
521
543
2,196
1,678
4,020
-45
1
-64
101
130
404
-1.9
0.0
-1.8
0.8
1.4
1.9
Metropolitan Areas
Total
Notes: Metropolitan areas shown are those with population over 1 million in 1990. Metropolitan boundaries are as of 1996.
Central city includes named central city and all other cities in the metro area with population over 200,000 in 1990. New
York includes Newark and Jersey City. Los Angeles includes Long Beach, Anaheim, Santa Ana, and Riverside. San Francisco
includes San Jose and Oakland. Dallas includes Ft. Worth and Arlington.
Sources: US Bureau of the Census, “Estimates of the Population of Cities with Populations of 100,000 and Greater,” July 1,
1996; “Estimates of the Population of Metropolitan Areas,” July 1, 1996; and “County and City Databook,” 1994.
33
Table A-6
Home Purchase Loan Activity for Large Metropolitan Areas: 1997
% Residing
in Suburbs
Total
% of Loans
to Minorities
Made:
% of Loans Made:
To
To
LowHighIn Mostly
In
To
Income
Income
In
White
Suburbs Minorities Borrowers Borrowers Suburbs Suburbs
% of Loans
to Low-Income
Borrowers Made:
% of Loans
to High-Income
Borrowers Made:
In
Moderate/
HighIn
Income
In
Suburbs Suburbs Cities
Number of
Loans
All
Owners
(1990)
Minority
Owners
(1990)
In
Low-Income
City Areas
3,241,681
67.7
47.5
70.7
19.0
28.4
43.2
60.0
19.2
66.1
33.1
27.2
3.7
501,974
729,107
1,203,530
807,070
75.8
67.1
66.6
61.6
42.7
31.2
49.0
56.8
77.6
70.1
72.7
64.0
15.0
12.1
20.9
24.9
25.5
33.0
29.7
24.2
45.6
37.0
43.5
47.1
52.0
49.2
65.7
60.6
22.6
26.3
13.8
7.0
71.5
61.3
70.5
60.3
36.7
33.6
33.9
28.8
20.0
23.2
26.9
34.8
2.9
4.6
3.3
4.2
192,632
72,854
77,810
23,564
71.8
71.1
78.9
87.9
45.5
33.0
50.7
57.7
73.3
81.0
77.5
89.9
23.1
17.9
9.8
6.0
20.6
32.2
26.5
24.3
51.0
41.8
43.1
49.5
53.2
51.4
51.2
68.2
16.4
21.4
36.5
47.5
78.5
63.0
65.8
84.8
37.0
34.2
34.0
31.6
30.3
8.1
15.5
7.7
3.2
1.7
4.1
1.7
14,168
12,327
12,589
10,314
92.7
65.9
84.7
75.3
64.5
41.9
41.2
22.1
92.0
65.8
85.5
81.6
14.9
8.5
8.9
8.3
37.8
27.5
30.6
26.8
32.1
40.1
39.2
41.9
74.0
32.6
42.7
37.2
36.1
26.1
37.6
30.6
87.2
51.5
74.0
64.9
48.6
37.9
36.6
40.3
3.7
24.0
7.4
9.7
0.9
4.1
3.2
2.6
All Metro Areas in the:
Northeast
Midwest
South
West
Largest Northeastern Metros
New York
Philadelphia
Boston
Pittsburgh
Hartford
Providence
Rochester
Buffalo
Largest Midwestern Metros
34
Chicago
Detroit
Cleveland
Minneapolis
128,744
90,730
40,643
50,666
69.7
77.9
75.2
78.9
33.9
24.3
37.2
50.2
71.2
86.8
77.6
81.8
25.1
13.0
12.2
8.6
29.9
34.2
30.1
41.2
39.6
36.7
40.3
28.6
54.4
52.1
48.2
53.4
17.0
28.7
25.5
49.7
65.1
78.4
60.8
73.5
40.8
42.1
37.4
38.6
24.9
7.2
10.8
12.0
7.1
2.1
4.1
2.3
St. Louis
Cincinnati
Kansas City
Milwaukee
43,096
32,675
29,169
22,638
81.1
80.5
60.6
61.5
53.9
46.3
17.4
13.1
85.5
83.3
68.2
66.1
13.0
7.1
9.9
12.6
37.6
31.6
33.7
25.7
34.2
38.6
37.0
41.9
73.4
60.2
40.9
21.3
32.1
38.0
34.4
20.0
79.6
78.2
60.4
43.1
38.2
37.7
32.0
31.3
9.2
13.9
26.4
19.7
3.0
4.7
2.1
4.1
117,865
83,216
63,930
83,080
81.2
59.1
58.4
90.3
60.7
35.6
40.2
69.9
85.1
69.1
71.7
92.9
26.7
19.1
28.0
24.7
37.0
27.4
28.0
32.6
34.5
46.4
48.1
39.3
79.1
58.4
61.7
92.6
12.4
12.0
6.5
32.2
81.2
61.4
64.3
93.9
42.1
28.0
40.3
44.6
13.0
27.5
26.0
9.2
3.0
3.2
3.9
1.5
62,354
41,370
22,039
20,005
87.3
73.6
27.9
32.6
83.5
48.5
22.6
19.8
88.1
77.4
34.6
46.4
54.1
13.8
22.2
38.6
23.7
29.3
28.3
24.7
49.0
45.3
40.8
50.2
89.9
66.7
25.4
38.1
5.3
25.1
4.4
2.7
91.2
74.4
26.4
40.1
46.3
32.2
16.4
25.9
15.1
21.5
57.9
50.8
4.8
2.1
4.5
2.8
192,321
102,420
66,892
67,997
69.1
60.9
71.4
35.0
67.5
48.1
54.3
36.7
70.0
62.0
74.8
45.5
39.3
32.0
13.3
15.4
20.7
17.2
24.9
30.3
51.7
56.4
42.5
42.4
68.2
55.9
70.1
38.8
0.9
1.9
35.5
9.8
68.8
56.4
72.9
41.8
32.9
26.3
32.7
19.9
29.9
34.9
25.4
55.2
3.6
5.1
3.5
3.5
26,002
37,011
57,388
41,293
72.7
53.8
70.1
69.3
51.6
43.4
52.1
51.9
77.3
51.7
75.5
74.4
22.6
22.7
15.4
10.5
25.9
17.8
34.0
20.5
45.9
56.6
35.8
49.1
61.9
48.5
64.7
70.0
6.8
2.3
18.4
47.3
69.1
50.7
70.7
67.4
40.0
24.6
38.0
32.2
17.9
49.3
22.4
23.0
2.2
3.1
5.8
5.7
Largest Southern Metros
Washington
Dallas
Houston
Atlanta
Miami/Ft. Lauderdale
Tampa/St. Petersburg
Norfolk, VA
San Antonio
Largest Western Metros
Los Angeles
San Francisco
Seattle
Phoenix
Sacramento
San Diego
Denver
Portland
Notes: Metropolitan areas shown are the eight largest in each region. Metro boundaries are as of 1996. Excludes loans made
outside metro areas, in Puerto Rico, or for which valid applicant income was not given. Mostly white areas are those in which
minorities made up less than 10% of the population in 1990. Low-income loans are those to borrowers with incomes less than
80% of metro median in 1997. High-income loans are those to borrowers with incomes at or above 120% of metro area median in
1997. Low-income areas are those in which the tract median income was less than 80% of the metro median in 1989. Moderate/
high-income suburbs are those in which the tract median income was at or above the metro median in 1989. Freddie Mac data on
the share of tract population in central cities was used to apportion the loan and owner data to central cities and suburbs.
Sources: Joint Center tabulations of the 1997 Home Mortgage Disclosure Act data and 1990 Decennial Census STF 3A files;
Freddie Mac data on the share of tract population in central cities.
Table A-7
Income and Housing Costs, US Totals: 1975-1998
1998 Dollars
Cost as Percent of Income
Monthly Income
Owner Costs
Renter Costs
Owners
Renters
Year
Owner
Renter
Home
Price
Mortgage
Rate
Mortgage
Payment
After-Tax
Mortgage
Payment
1975
1976
1977
3,287
3,316
3,439
1,909
1,875
1,891
101,254
103,376
107,869
8.92
8.87
8.82
728
740
769
600
610
680
407
407
408
468
471
475
22.1
22.3
22.4
18.2
18.4
19.8
21.3
21.7
21.5
24.5
25.1
25.1
1978
1979
1980
3,381
3,359
3,268
1,871
1,836
1,733
115,639
118,718
115,815
9.37
10.59
12.46
865
985
1,109
744
837
919
409
401
394
477
470
466
25.6
29.3
33.9
22.0
24.9
28.1
21.8
21.9
22.7
25.5
25.6
26.9
1981
1982
1983
3,287
3,296
3,328
1,719
1,677
1,691
111,222
107,992
107,278
14.39
14.73
12.26
1,217
1,208
1,012
991
999
840
392
399
406
467
479
490
37.0
36.6
30.4
30.2
30.3
25.2
22.8
23.8
24.0
27.2
28.6
29.0
1984
1985
1986
3,412
3,509
3,631
1,739
1,767
1,797
106,974
108,602
114,009
11.99
11.17
9.79
990
943
885
827
790
745
411
423
440
494
505
521
29.0
26.9
24.4
24.2
22.5
20.5
23.6
23.9
24.5
28.4
28.6
29.0
1987
1988
1989
3,671
3,674
3,724
1,782
1,826
1,895
117,653
120,032
121,528
8.95
8.98
9.81
848
868
945
741
777
840
442
441
437
519
515
510
23.1
23.6
25.4
20.2
21.1
22.6
24.8
24.2
23.1
29.1
28.2
26.9
1990
1991
1992
3,617
3,560
3,534
1,819
1,735
1,694
119,101
116,554
116,293
9.74
9.07
7.83
920
849
756
819
760
685
432
429
427
503
499
496
25.4
23.9
21.4
22.6
21.4
19.4
23.8
24.7
25.2
27.6
28.8
29.3
1993
1994
1995
3,488
3,575
3,617
1,692
1,732
1,758
115,453
115,755
116,354
6.93
7.31
7.69
686
715
746
628
655
681
424
424
422
494
492
489
19.7
20.0
20.6
18.0
18.3
18.8
25.1
24.5
24.0
29.2
28.4
27.8
1996
1997
1998
3,657
3,748
3,819
1,781
1,784
1,787
117,641
119,917
124,500
7.58
7.52
6.97
746
756
743
681
690
681
421
424
431
487
490
495
20.4
20.2
19.5
18.6
18.4
17.8
23.7
23.8
24.1
27.4
27.5
27.7
Contract
Rent
Gross
Rent
Before-Tax
Mortgage
Payment
After-Tax
Mortgage
Payment
Contract
Rent
Gross
Rent
Notes: All dollar amounts are expressed in 1998 constant dollars using the Bureau of Labor Statistics' Consumer Price Index
(CPI-UX) for All Items. Monthly incomes of families and primary individuals from 1975 to 1983 are from the American Housing
Survey; incomes from 1984 to 1997 are from the American Housing Survey adjusted by the Current Population Survey. Incomes for
1998 are adjusted by HUD median family income data, weighted by owners' and renters' contribution to income growth as calculated from the 1996 and 1997 Current Population Surveys.
Home price is the 1990 median sales price of existing single-family homes determined by the National Association of Realtors,
indexed by the Freddie Mac Conventional Mortgage Home Price Index, deflated by the CPI-UX.
Mortgage rates are from the Federal Housing Finance Board Monthly Interest Rate Survey. Mortgage payments assume a 30-year
mortgage with 10% down. After-tax mortgage payment equals mortgage payment less tax savings of homeownership. Tax savings are
based on the excess of housing (mortgage interest and real-estate taxes) plus nonhousing deductions over the standard deduction. Nonhousing deductions are set at 5% of income through 1986; they decrease to 4.25% in 1987 and 3.5% from 1988 on.
Contract rent equals median 1977 contract rent from the American Housing Survey, indexed by the CPI residential rent index,
with adjustments for depreciation in the stock before 1987. Gross rent equals contract rent plus fuel and utilities.
Table A-8
Owner and Renter Households and Homeownership Rates by Age of Head:
2000-2010
2000
Owners
(Thousands)
Total
2005
Renters
Homeownership
(Thousands)
Rate (%)
Owners
(Thousands)
2010
Renters
Homeownership
(Thousands)
Rate (%)
Owners
Renters
(Thousands)
(Thousands)
Homeownership
Rate (%)
70,277
34,459
67.1
75,349
35,041
68.3
80,461
35,883
69.2
Under Age 25
Aged 25 to 34
830
7,945
4,112
9,489
16.8
45.6
908
7,790
4,490
9,182
16.8
45.9
960
8,160
4,744
9,688
16.8
45.7
Aged 35 to 44
Aged 45 to 54
15,936
16,138
8,160
5,187
66.1
75.7
15,308
17,922
7,494
5,813
67.1
75.5
14,169
18,904
6,689
5,966
67.9
76.0
Aged 55 to 64
Aged 65 to 74
11,574
9,569
2,909
2,144
79.9
81.7
14,528
9,809
3,470
2,143
80.7
82.1
17,392
11,389
4,035
2,357
81.2
82.9
8,285
2,457
77.1
9,083
2,450
78.8
9,488
2,404
79.8
Aged 75 and Over
Source: Joint Center projections.
35
Table A-9
Housing Quality and Cost Burdens Among Extremely and Very Low-Income
Households: 1995
Thousands
Owners
Renters
Total
Severely
Burdened Only
Severely
Inadequate Units
Total
Severely
Burdened Only
Severely
Inadequate Units
5,638
2,566
195
5,751
3,753
245
1,020
1,349
2,253
1,016
587
635
877
467
24
32
108
32
1,373
1,160
1,697
1,520
892
768
1,013
1,079
94
43
69
39
1,506
2,693
1,438
708
1,330
529
45
72
79
2,994
1,908
850
2,004
1,298
450
152
48
45
4,203
869
436
129
1,940
387
178
61
118
54
16
7
3,023
1,329
1,097
303
1,956
861
712
224
96
81
62
6
659
418
1,726
2,834
410
250
600
1,307
31
17
36
112
670
1,480
925
2,675
419
1,035
525
1,775
25
45
27
149
63
379
713
725
955
2,803
35
220
416
409
484
1,004
2
12
31
26
31
93
938
1,370
1,105
639
485
1,214
720
908
709
398
318
699
31
58
50
37
29
40
6,069
895
163
5,021
1,178
151
1,203
1,489
2,338
1,038
206
168
296
224
21
35
76
31
893
946
1,701
1,480
266
151
341
421
49
39
40
24
1,518
2,853
1,697
244
468
183
45
63
54
2,237
1,949
834
532
450
196
68
49
34
4,804
721
425
119
661
101
82
51
114
31
15
2
2,911
906
962
241
768
185
166
60
70
40
30
11
778
497
1,609
3,184
163
136
149
447
20
14
26
103
963
982
544
2,532
109
196
194
679
27
25
10
89
80
437
783
638
773
3,358
26
100
199
181
108
281
0
10
24
20
41
66
806
1,468
1,081
538
340
788
201
283
192
163
88
251
18
30
39
30
19
14
Extremely Low Income
Total
Region
Northeast
Midwest
South
West
Location
Central City
Suburb
Nonmetro
Race/Ethnicity
White
Black
Hispanic
Other
Household Type
Married with Children
Single Parent
Single Elderly
Other
Age of Head
36
Under 25 Years
25 to 34 Years
35 to 44 Years
45 to 54 Years
55 to 64 Years
65 Years and Over
Very Low Income
Total
Region
Northeast
Midwest
South
West
Location
Central City
Suburb
Nonmetro
Race/Ethnicity
White
Black
Hispanic
Other
Household Type
Married with Children
Single Parent
Single Elderly
Other
Age of Head
Under 25 Years
25 to 34 Years
35 to 44 Years
45 to 54 Years
55 to 64 Years
65 Years and Over
Notes: Extremely low income is less than 30% of area median; very low is between 30% and 50%. Severely burdened defined as households
paying 50% or more of their incomes for gross monthly housing costs. Severely inadequate defined as having severe problems in plumbing, heating, electrical systems, upkeep or hallways. Renter households exclude those with federal subsidies. Hispanics may be of any
race. Other households includes Asians, Pacific Islanders, Native Americans, and all other racial groups not shown separately.
Source:
Joint Center tabulations of the 1995 American Housing Survey.
Prepared by the staff of the Joint Center for Housing Studies of Harvard University
Kermit Baker
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Joint Center for Housing Studies of Harvard University
79 John F. Kennedy Street, Cambridge, MA 02138 Tel: (617) 495-7908 Fax: (617) 496-9957 www.gsd.harvard.edu/jcenter