Next is the homeownership rate we would expect to see of 25-54 year olds, assuming 2014 ownership rates for each age group. In other words, the second graph shows how changing age demographics over time affected aggregate homeownership rates, assuming that the ownership rate of each age group has been stable.
It looks like homeownership rates were rising in the 1970s in spite of strong demographic trends pushing expected ownership rates down. Demographics may have hidden the strong rise in homeownership demand created by inflationary factors.
On the other hand, demographics were pushing homeownership up in the 1990s and 2000s.
In the next graph, I have charted the actual homeownership rate. Then, I have adjusted the actual homeownership rate with the ratio of the changing 25-54 year old aggregate rate given in the first graph. Once we have adjusted for demographics, we see that the rise in homeownership in the 1970s was stronger than the rise in the 1990s and 2000s. Once we account for demographics, we may not need much of an explanation for rising ownership after 1995. I have previously argued that the rise in homeownership rates did not correlate that strongly with rising prices in the 1995-2005 period. I had argued that if the rise in ownership in the mid-to-late 1990s was attributable to public programs like the CRA, those programs did not cause home values to rise relative to rents, because much of the increase in homeownership rates happened before home prices began to rise. This demographic data suggests that public programs like the CRA may have had much less of an effect, even on homeownership rates, than it appears, at first glance. A demographic explanation also explains how homeownership rates were rising in the 1990s and 2000s without any significant decline in homebuyer financial characteristics. Demographically, there were simply more households naturally in a position to be owners.