In the recent post on homeownership rates by age, Ironman helpfully pointed me to some archived Census information before 1994. I haven't been able to find age-specific homeownership rates in the old pdf files, but I did realize that there is digital data going back to 1982.
This confirms that there was a similar rise in homeownership among the younger age groups in the late 1970s and early 1980s. I did find one other source with some decadal age data, and it suggests that homeownership rates in 1970 were slightly lower than 1980 for both young and old households.
It looks like homeownership has been pushed up slightly because of a permanent increase in ownership rates for households over 65 years old from 1982 to around 2000, where it leveled off at a rate similar to 55 to 64 year olds.
From 1982 to 2005, homeownership rates for 45 to 64 year olds were fairly stable at high levels. Note that there was very little change in ownership among these groups during the boom, but ownership has fallen by about 5% for both of those groups since then. This is a story of a bust, not a bubble, folks.
In 1982, homeownership for 35-44 year olds was higher than it was at its peak in 2005. The rate for households younger than 35 was also near the 2004 peak in 1982, and the decadal source suggests that it also peaked at a level at least as high as 2004. Of course, 1982 was a time of crazy speculation, when households took on unsustainable mortgages because they were convinced that home prices would never stop rising because of loose monetary policy.
But seriously, as I have mentioned before, this seems like strong evidence that credit fueled demand and easy credit terms aren't as strong a factor as people seem to think. Before 1982, real long term interest rates were very low and nominal rates were very high. That made mortgage term onerous. But, the low real rates meant that homes had high intrinsic values because future rents were worth more in present value. Also, the high inflation meant that imputed rental income and accumulating capital gains on homes provided a significant tax advantage. Whichever of these factors dominated, they clearly overpowered the negative influence of those payments on 12% mortgage rates.
If intrinsic value is what dominates, then these changing homeownership rates simply reflect marginal reactions to real long term interest rates. If the tax benefits of inflationary gains are what dominate, then that same effect would not have been as important in the 2000s, because inflation was lower. So, the rising homeownership rates in the 2000s could reflect some ease of ownership resulting from low interest rates and aggressive lending. And, there might have been a secondary effect of the tax benefits on the high home price appreciation that was happening at the time, even though that wasn't a reflection of broader inflation.
The 1970s and the 1995-2005 periods also were periods with rent inflation, so rising homeownership rates in both periods could have been a sort of hedging reaction, where younger households felt more incentive to avoid the uncertainty of future rising rents. (By the way, put another knot in the rope for the theory that urban housing supply constrictions are actually a cause of the declining real interest rates, because they remove some uses of capital while producing capital gains for existing capital. It so happens that we have two periods where rent inflation was high, real long term interest rates were low, and home prices were high. I don't have detailed data on metropolitan specific housing measures for the 1970s, but there seems to be evidence that urban housing constraints were ratcheted up during that period.)
In any case, what is clear is that for households over 45 years old, homeownership was never elevated, and has dropped precipitously since the bust. And for households under 45 years old, there do seem to be systematic fluctuations in homeownership over time, and homeownership rates in 2005 were within the range of ownership levels we had seen before. In fact, they were at a level we had seen when mortgage rates were over 10%, so there simply is no reason to think that marginal homeowners in the 2000s needed to be any different or less suited than households who might have owned homes at other times in the HUD era.
PS: I also found this graph on page 131 of this report, which gives us some age-specific information going back to 1960. This also shows 1980 homeownership rates for working-age households at the same level as in 2000. And households skewed younger in 1980 than in 2000, so within each age group, ownership would have been higher in 1980 to make up for the demographic shift.