Working Paper: NBER ID: w2375
Authors: Patric H. Hendershott
Abstract: This paper summarizes the impact of economic, social and demographic variables on household formations and home ownership in the 1960-85 period and uses this knowledge to forecast household formations, and their split between owners and renters, through the year 2000. High and low growth forecasts are reported, both with and without enactment of the Tax Reform Act of 1986. The forecasts are compared with those of others. Net household formations are expected to be robust through 1990 (above 1 1/2 million per year), but to tail off sharply in the 1990s (down to 1 million by 2000). Home ownership should rise slightly in the 1990s.
Keywords: household formation; home ownership; demographics; taxes; real estate
JEL Codes: R21; R31
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| aging of the baby boomers (J14) | increase in aggregate home ownership rates (R21) |
| demographic changes (J11) | increase in headship rates (J12) |
| Tax Reform Act of 1986 (H20) | rise in home ownership rates (R21) |
| demographic changes (J11) | increase in household formations (R21) |
| increase in headship rates (J12) | increase in aggregate headship rate (J19) |
| maturation of baby boomers (J26) | increase in headship rates (J12) |