Has homeownership been inflated? The role of variable household formation in distorting homeownership rates between groups and over time

Conventional definition of homeownership is based on the share of households,
which ignores the variable effects of household formation. We study whether
such omission leads to a distorted assessment of trends and differentials in
homeownership. In the 1990s, many groups experienced a decline in household
formation, which indirectly elevated the overall homeownership rate by
removing renters. Moreover, Asians have very low household formation but high
homeownership rates, which are in contrast to Latinos and African Americans.
We find that higher homeownership rates for Asians stems from their suppressed
level of renter household formation and their greater share of adults not forming
households. The overall conclusion is that, without accounting for household
formation, current measures of homeownership are a deficient indicator of
housing success.