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The Future of Home Ownership Rates

Jan 03, 2017

Research, Trends and Perspectives from the Harvard Joint Center for Housing Studies (JCHS)

Following the rise and fall in the homeownership rate over the past two decades, considerable uncertainty exists about the homeownership rate’s future trajectory. Jonathan Spader, Senior Research Associate at the JCHS, recently examined the implications of different homeownership rate outcomes for future growth to construct three scenarios that reflect a range of possible homeownership outcomes.

  • Scenario 1 (“Base Scenario”) – Constant homeownership rates. This scenario describes the likely outcomes if homeownership rates stabilize near their current levels.
  • Scenario 2 (“Low Scenario”) – Continued decline through 2020. This scenario describes the likely homeownership outcomes if the homeownership rate’s ongoing decline continues for several more years before stabilizing.
  • Scenario 3 (“High Scenario”) – Homeownership rates return to pre-boom levels.  This scenario uses the 1995 homeownership rates to define the pre-boom levels that might reflect a longer-term equilibrium.  While such homeownership rate increases may be more plausible over longer-term periods than in the next few years, the high scenario applies these rates to all time periods, providing estimates of homeowner growth if the rates are realized within each time horizon.


The base scenario’s projections show a partial recovery which reflects the possibility that slowing foreclosures and a strengthening economy will ease the downward pressure on the homeownership rate in coming years.  The relative importance of these offsetting pressures will only be known with time, so the base scenario’s projections should be interpreted as a reference point for homeownership outcomes if the overall rate stabilizes around its 2015 level.

The low scenario describes the consequences of continued declines through 2020 before the homeownership rate stabilizes.  The projected declines in the homeownership rate through 2020 reflects the replication of recent trends reflecting the already-low 2015 homeownership rates.

In contrast, the high scenario projections describe homeownership outcomes under assumptions that project a reversal of recent declines and returns homeownership rates to levels slightly above the pre-boom period. The higher homeownership rates produced by this scenario reflect the combination of 1995 homeownership rates with an adjustment for longer-term upward trends in the homeownership attainment of certain groups, particularly older households

Read Jonathan Spader's full report in the JCHS Housing Perspectives which covers research, trends, and perspectives from The Harvard Center for Housing Studies.