Daniel McCue

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The Changing Demographics
of Homeownership
Daniel McCue
October 20, 2014
© PRESIDENT AND FELLOW S OF HARVARD COLLEGE
Homeownership Remains Under Pressure
Source: JCHS tabulations of US Census Bureau, Housing Vacancy Surveys.
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© PRESIDENT AND FELLOW S OF HARVARD COLLEGE
Stability Among Older Households Have Prevented an
Even Larger Fall-off in the National Homeownership Rate
Source: JCHS tabulations of US Census Bureau, Housing Vacancy Survey.
© PRESIDENT AND FELLOW S OF HARVARD COLLEGE
Homeownership Rate Declines Have Been
Uneven Across Household Types
Source: JCHS tabulations of US Census Bureau, Current Population Surveys.
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Homeownership Rate Declines Have Also Been
Steeper for Minorities
Notes: White, black and Asian/other households are non-Hispanic. Hispanic households can be of any race.
Source: JCHS tabulations of US Census Bureau, Housing Vacancy Surveys.
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Disproportionate Drops by Race/Ethnicity Have
Reversed Gains Made in Reducing Homeownership
Rate Gaps Between Whites and Minorities
Notes: White and black households are non-Hispanic. Hispanic households may be of any race.
Source: JCHS tabulations of US Census Bureau, Housing Vacancy Surveys.
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Minorities Will Account for Three-Quarters of
Household Growth Over the Coming Decade
Note: White, black, and Asian/other households are non-Hispanic. Hispanic households may be of any race.
Sources: JCHS tabulations of US Census Bureau, 2012 American Community Survey; JCHS 2013 middleseries household projections.
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The Older Population Is on Track to Increase
Dramatically
Population by Age Group (Millions)
Source: US Census Bureau, Decennial Censuses and 2012 National Population Projections (middle series).
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By Age 80, Adults Are Far More Likely to Have Disabilities
than to Live in Accessible Homes
Shares of Housing Units and Population with Disabilities by Age Group (Percent)
Notes: Accessibility features specifically include no-step entry, single-floor living, extra-wide hallways and doors, accessible electrical controls and
switches, and lever-style handles on doors and faucets. Disabilities include hearing, vision, cognitive, mobility, self-care, and independent living
difficulties. Data include only occupied housing units.
Source: JCHS tabulations of US Department of Housing and Urban Development, 2011 American Housing Survey, and US Census Bureau, 2012
American Community Survey.
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Trends Behind the Trends
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The Rise and Fall in Homeownership Among Younger
Households Mirrors Income Trends
25–34 Year Olds
35–44 Year Olds
Note: Incomes are adjusted for inflation by the CPI-U for All Items.
Source: JCHS tabulations of US Census Bureau, Housing Vacancy Surveys and Current Population Surveys.
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White-Minority Income Gaps Have Increased for All but the
Oldest Age Group
Source: JCHS tabulations of US Census Bureau, Current Population Surveys.
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Renter Incomes Have Not Kept Up with Housing Costs
Percent Change in Median Value Since 2001
Notes: Values are adjusted for inflation by the CPI-U for All Items. Data exclude renters paying no cash rent.
Source: JCHS tabulations of US Census Bureau, American Community Surveys.
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The Share of Renters with Affordability Problems
Has Doubled in the Last 50 Years
Notes: Rent includes tenant-paid utilities. Moderately (severely) cost-burdened renters pay 30-50% (more than 50%) of pre-tax
household income for housing. Renters with zero or negative income are assumed to be severely burdened, while renters not paying
cash rent are assumed to be unburdened.
Source: JCHS tabulations of US Census Bureau, 1960-2000 Decennial Censuses and 2010 American Community Survey.
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Student Loans Have Driven Up Consumer Debt
Burdens
Notes: All other consumer debt includes credit card debt, auto loans, retail loans, and personal loans. Annual
balances are averages of quarterly data.
Source: Federal Reserve Bank of New York, Quarterly Report on Household Debt and Credit, February 2014.
© PRESIDENT AND FELLOW S OF HARVARD COLLEGE
Financing Constraints Weigh Heavily on
Potential Homebuyers
Percent of Respondents
Source: Fannie Mae National Housing Survey, 2011:Q3.
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Minority and Low-Income Households Are Much
More Likely to Be Denied Mortgages
Source: JCHS tabulations of 2011 Home Mortgage Disclosure Act data.
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Access to Credit Has Lagged for Minorities and LowerIncome Borrowers
Change in First-Lien Loans, 2011–12 (Percent)
Notes: White borrowers are non-Hispanic. Hispanic borrowers include only white borrowers of Hispanic origin. Asian/other includes American Indians,
Alaska natives, and native Hawaiians and other Pacific Islanders. Data include only first-lien loans to owner-occupants for one- to four-unit properties.
Low- (moderate- /middle- / high-) income borrowers have household incomes below 50% (50–79% / 80–119% / 120% or more) of area medians.
Source: Neil Bhutta and Glenn B. Canner, Mortgage Market Conditions and Borrower Outcomes: Evidence from the 2012 HMDA Data and Matched
HMDA-Credit Record Data, Federal Reserve Bulletin, November 2013.
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Housing is the Major Form of Wealth for Low-Income and
Minority Households
Median Housing Wealth as a Share of Household Net Worth (Percent)
Notes: Data exclude renters and households with zero or negative income. Income quartiles are equal fourths of all households
ranked by income. White, black and other households are non-Hispanic; Hispanic households can be of any race.
Source: JCHS tabulations of Federal Reserve Board, 2010 Survey of Consumer Finances.
© PRESIDENT AND FELLOW S OF HARVARD COLLEGE
While Maybe not for their Next Home, the Large
Majority of Young Renters Plan to Buy a Home
Sometime in the Future
Source: Fannie Mae National Housing Survey, 2013 Q4.
http://www.fanniemae.com/resources/file/research/housingsurvey/pdf/nhsmay2014presentation.pdf
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Final Points
• Homeownership declines have been widespread, but
suffered disproportionately across key demographic
groups.
• Millennials (born 1985-2004) in their 20’s, are the major
source of new demand.
• They are the largest and most diverse generation ever:
– 85-86 million in 2012, relative to 77-78 million baby
boomers at similar age in 1972.
– Already responsible for 16 million households, will be
40 million by 2025.
• Most (nearly all) expect to buy a home in the future, just
maybe not their next home.
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