When I posted about whether young people are "falling behind" their parents, almost all of the commenters agreed that a big part of the reason that even relatively affluent young adults *feel* poor is that homeownership seems so out of reach (even with the declining market). This made a lot of intuitive sense to me.
But my dad then sent me a ton of Census data on homeownership rates by age, going back to 1982.* (Yes, I come by my geekery honestly.) And his point is that households under age 35 were just about as likely to own homes in 2008 (41.7 percent) as in 1982 (41.2 percent). Homeownership rates for this group hit a low of 37.3 percent in 1993-1994, and then rose to 43.1 percent in 2004, before falling off slightly.
So how is it possible that homeownership can feel so out of reach to almost everyone I know, even as the homeownership rate didn’t decline at all? Well, part of the answer is that I live in an expensive housing market, so the "everyone" I know is a biased sample. (The readers of this blog are more diverse, but I think are still disproportionately living in large urban areas, compared to the country as a whole.) Also, a whole lot of condos were built in the 1990s, so if by "homeownership" you mean "owning a single family detached home," the homeownership rate probably did decline somewhat.
But it’s also true that a lot of people — at all age groups — bought homes only by extending themselves to their limits. There was this credit bubble that you might have heard about… (Supposedly in 2005, half of all loans made in DC were interest-only.) And there was this dreadful fear that if you didn’t jump in right away, even if you couldn’t really afford it, you’d be priced out forever. So, the people who didn’t buy houses felt like they were falling behind because they couldn’t afford a home, and the people who did felt like they were falling behind because they couldn’t afford anything else.
*The Census table is only online as a text file — if you want my Dad’s Excel spreadsheet, I’m happy to send it on.