Authors: James W. Hughes
1996
Publication:
Fannie Mae Foundation

From 1980 to 1988, homeownership rates declined substantially for the first time in the postwar era. They stabilized and began to creep upward during the 1988 - 94 period. After presenting a long-term perspective, this article describes and examines two of the underlying forces of this upswing — demographic aging and improved levels of affordability — as well as the impact of immigration and minority lags. Fundamental economic factors are then surveyed: national and regional housing price shifts, housing production cycles, measures of housing affordability, and employment. Several key economic parameters of the post-recession housing market are presented as a guide to the short-term future. Post-1988 homeownership rates initially rose because of an aging demography. But gradually, the new affordability became part of the dynamic. The new affordability was driven by the decade-long slowdown and weakening of housing prices, lower post-recession interest rates, and accelerated job creation following the period of "jobless" economic growth.

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