Home ownership shifting to older, better-off Americans

December 01, 1991|By Tim Schreiner and Judy Miller | Tim Schreiner and Judy Miller,San Francisco Chronicle

Home ownership rates across the nation held mysteriously steady in the 1980s, masking a sizable redistribution of home ownership to older and financially well-off people.

Despite the often-voiced belief that few people could afford to buy a house, whites and people over 60 increased their home ownership during the decade.

However, increased ownership for those groups offset dramatic reductions in the home-buying capabilities of young and middle-aged people as well as blacks and Hispanics during the decade, a Chronicle computer analysis of unpublished 1990 Census results shows.

Skyrocketing house costs have been well-documented, but the inability of many people to buy homes "is a phenomenon enormously complicated by location, readiness to buy, race and income in addition to the price of housing," said Margery Turner, senior researcher at the Urban Institute in Washington, D.C.

University of Michigan researcher Reynolds Farley puts it another way: "The groups that have fallen in home ownership are those whose incomes have not kept up."

About the only people who have found it easier to buy homes in the past decade were whites older than 60, according to The Chronicle's analysis.

Other people in the United States "face shrinking opportunities for home ownership," Turner said. "And it is the result of population growth and economic trends trends that are hard to buck."

The economic trend hurting home ownership is simple: "the rich have gotten richer and the poor have gotten poorer," she said.

To see how population growth holds down home ownership, housing expert Richard Alba said, "look at the groups forming California's new households immigrants, racial and ethnic minorities, single parents, young people." They are at the point in life when they want to buy houses but they are less likely to have the needed money, said the State University of New York sociology professor.

As the home ownership rates dropped significantly for people under 60, blacks, Hispanics and people with less than an upper middle-class income, rates increased significantly for whites and senior citizens and that helped keep the overall rate stable, the according to the analysis of the Census results.

Several housing experts suggest that what is happening is a gradual redistribution of home ownership to older and financially well-off people.

In the early 1980s, for example, the median age of first-time homebuyers was 27. By this year, it had risen to 35 an astonishing jump in less than a decade. During the '80s, ownership rates decreased for all age groups below 60, according to the National Association of Homebuilders, and the group with the highest rate jumped from people in their late 50s to people in their late 60s.

Income differences showed similar results. In 1986, the median income of all California homebuyers was $48,000; only four years later homebuyers' median income had increased to $60,000.

Perhaps Americans' abilities to buy homes is tapped out, and given the fact that most population growth is among poorer groups of immigrants and racial and ethnic minorities who cannot afford homes, the rate will decrease.

"If you don't own your home, you probably can't afford one," a headline in a demographics magazine theorized recently. Three-quarters of the renters in the United States are so poor they cannot afford a home priced higher than $20,000. Yet, a home costing $192,930 the median priced home in California on January 1 would require a down payment of $38,500 and an income of $63,300 a year.

Hispanic home ownership rates are held down by increasing numbers of immigrants from Mexico and Central America, who arrive in this country with little money and even less ability to accumulate savings for a down payment on a costly home.

Only 40.4 percent of California's Hispanics own their own home, a drop from 42.4 percent a decade ago. For blacks, the situation is worse. Only 36.5 percent own nearly half the rate for whites.

"Blacks' income hasn't decreased," said the University of Michigan's Farley, "but it hasn't increased either." In addition, the increasing number of black families headed by poor women has kept many from buying a home, he said.

A Federal Reserve Board study this month showed that blacks were rejected for home loans more than twice as often as non-Hispanic whites, and Hispanics were turned down 11/2 times as often as whites even when incomes were similar.

"The cost in human terms is staggering," said House Banking Committee chairman Henry Gonzalez, D-Texas.

Despite the inability of many to buy their own four-wall version of The American dream, "demand for home ownership is there," said David Hayes-Bautista, a UCLA economist. Hispanics, California's largest minority group, form families at an early age. The nation's huge baby boom generation also is at an age when it is marrying and having babies and should be buying homes.

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