CCRE SPECIAL EVENT: Age and Racial Trends Change Homeownership
USC Sol Price School of Public Policy Professor Dowell Myers recently presented research revealing details of how historical trends have built the housing shortage in California today. Myers reviewed how significantly higher percentages of homeowners than ever before are holding onto their homes until much later in life — into their 70s and even 80s. At the same time, housing construction has slipped further behind job growth over the past three decades, particularly in the biggest metropolitan areas. As a result, fewer homes are re-entering the market and even fewer new homes are available for younger, first-time home buyers. A smaller than expected cohort in Generation X hit three successive market downturns after college before enjoying a brief upswing just before the Great Recession of 2008 hit and once again knocked many back into the rental market or to other states where homes were more affordable.
However, Dr. Myers revealed that millennials are now poised to hit the age of prime home purchasing, ages 30-39. Now that housing supply is at an all time low compared to demand, the pressure is on to meet millennials’ housing needs. As the number of homes available for purchase shrinks, Myers found that an unexpected effect is that more would-be-home buyers are forced to remain in rental homes. This in turn drives up both the price and competition for existing rental homes, which all but eliminates what would otherwise have become affordable housing.
These trends affect communities of color to varying degrees. Dr. Myers’s research revealed that Asian and Hispanic households have increased their rates of homeownership over the last few years, while African Americans and white households have decreased their rates of homeownership, although the younger generations of African Americans are faring better than older generations did.