Baby boomers who are late bloomers in terms of buying a first home are expected to reverse the trend toward declining homeownership that continued through much of the 1980s, housing economists predict.
"The trailing edge of the baby boomers that didn't buy homes in the 1980s will probably buy in the 1990s," David W. Berson, chief economist at the Federal National Mortgage Association, said in an interview yesterday.
As have other national housing economists, Mr. Berson predicted that the percentage of U.S. households that will go from renting to owning their homes will rise from a low of 63.8 percent in 1988 to between 66 percent and 67 percent before the end of this decade.
Although the trend is expected to be gradual, each percentage point increase in the homeownership rate represents about 1 million more households owning their homes, Mr. Berson said. The average household includes 2.3 people.
Although the trend indicates that a larger proportion of Americans will own their own homes, it isn't expected to mean a roaring real estate market in the 1990s, the economists say, because the overall rate of household formation is slowing as the population ages.
During much of the 1980s, the purchase of a home was out of the reach of those at the tail end of the postwar baby boom, who are now in their late 20s and early 30s, said Dean Crist, a research economist at the National Association of Home Builders in Washington.
But relatively low single-digit mortgage interest rates -- along with steady or falling home prices -- have combined to make housing more affordable for the younger baby boomers, Mr. Crist said.
"The late baby boomers are now in a position to buy. That should cause the rate of homeownership to go up slightly in the '90s, though not by leaps and bounds," Mr. Crist said.
Affordability isn't the only thing that is slowly pushing up homeownership rates, however. Real estate specialists think subtle changes in the value systems of many Americans is making the purchase of a home more appealing to late baby boomers who postponed marriage and parenthood into their late 20s or early 30s.
"We're seeing people get back to the basic values. They're recognizing that they don't have to keep up with the Joneses," said Brandon Gaines, a partner with W.H.C. Wilson & Co., a real estate brokerage with offices in Roland Park and Lutherville.
At Timonium-based O'Conor Piper & Flynn, James P. O'Conor, chairman, made a similar point:
"The values of people today are shifting from the more materialistic things, like BMWs, to more traditional values of homeownership and family life."