AFTER A BRIEF RECESSION IN THE EARLY 1990s, the United States experienced a period of economic growth that, until recently, seemed unlimited. One of the apparent manifestations of prosperity in the economy has been the increase in home ownership over the last decade. According to a study using Current Population Survey (CPS) data, home ownership among U.S. families increased from 60.6% in 1989 to 62.6% in 1998. Both absolute and relative home ownership rates rose for black and Hispanic families over the same period, although in 1998 the home ownership rate for white families remained 50% higher than that for minorities. Home ownership rates were higher in 1998 than 1989 for families in each quintile of income distribution, although the amount of increase differs across groups (Bostic and Surette 2000). On the other hand (as any good economist would say), it is easy to obscure the bigger picture by focusing on such a narrow span of time. In the 30 years prior to the 1970s, home ownership rates increased by over 20 percentage points (Segal and Sullivan 1998). The increase in home ownership over the last few years followed two decades of stagnant or falling rates of home ownership. According to data from the American Housing Survey (AHS), the proportion of households owning the home in which they reside was 67.4% in 1975, dropped to 65.1% in 1985, and recovered to 66.1% by 1997 (Orr and Peach 1999).


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