Understanding the Minority Contribution to U.S. Owner Household Growth

W98-9: The high contribution of minorities to net owner household growth in recent years is due to fundamental differences in the age structures of white vs. minority households. Among non-Hispanic whites, new owner household formation by young adults is largely offset by owner household dissolutions among older cohorts. Minority owner household formation, particularly for Asians and Hispanics, takes place with relatively little net owner household loss by older cohorts. There are simply many more young adults in such minority groups to form new owner households, and fewer older owner households to dissolve. In the decades ahead, losses of owner households will increase, with the aging of the baby boom affecting non-Hispanic whites more than minorities. Other underlying demographic differences that affect the changing age distribution, particularly differences in fertility and immigration, will likely serve to strengthen the minority share of overall owner household growth in the future. In addition, any convergence in ownership rates between whites and minorities will raise the minority share of total owner households even more…