National home ownership rates increased dramatically from 43.6 percent in 1940 to 68.3 percent at the end of 2002.1 The greatest increase (42%) occurred between 1940 and 1960, raising the home ownership rate from 43.6 to 61.9 percent. Since 1960, home
ownership rates have increased, but only 6 percentage points in 42 years. This implies that home ownership rates have reached a plateau and will not go much higher, for veterans or the general population.
Table 6-1 shows the home ownership rates for veterans, active duty personnel, non- veterans/civilians, and the general population as reported by different data sources. We used four secondary data sources (external to VA) to compare home ownership rates of veterans and non-veterans: Survey of Consumer Finances (SCF); Integrated Public Use Microdata Series (IPUMS) from the Census; Current Population Survey (CPS); and National Survey of Veterans (NSV).
One of the outcomes for the VA Home Loan Guaranty program is that the veteran home ownership rate exceeds the rate for the general population. As shown in Table 6-1, veteran home ownership rates exceed the general population home ownership rates by 13 percent or more, depending on the year and data source.
While veteran home ownership rates exceed the general population home ownership rates by 13 percent or more, depending on the year and data source, differences in home
ownership rates between the veteran and general populations are partially a function of the demographic and socioeconomic make-up of the two populations. Hence, it is appropriate to “peg” the home ownership goal to the relative demographic and socioeconomic
composition of the two populations, and adjust the outcome measures accordingly.
The analysis in the literature suggests that older households and higher income households have a higher probability of home ownership. The ownership rate goal should take into account the relative share of households in different age groups in the general and veteran populations. For example, the percentage of older households in the general population could be adjusted upwards to reflect the higher percentage of older households in the veteran population. This would affect a higher ownership rate in the general population in comparison with the veteran population.
http://www.colorado.edu/libraries/govpubs/colonumb/ownrtype.htm; http://www.census.gov/hhes/www/housing/hvs/q103tab5.html.
Table 6-1. Comparison of Home Ownership Rates Population Group SCF Census CPS NSV 2001 2001 19902 2002 Veteran 80.9%3 73.0% 83.6% 78.5% Active Duty NA4 21.4% 40.0% NA Non-Veteran/Civilian 62.9%5 53.6% 64.4% NA General Population 67.7% 59.9% 68.0% NA
Difference between Veteran and
Non-Veteran +18.0% +19.4% +19.2% NA
Difference between Veteran and
General Population +13.2% +13.1% +15.6% NA
Source: Survey of Consumer Finance (SCF), Census IPUMS-1% Sample, Current Population Survey (CPS), and National Survey of Veterans (NSV) data
The study’s multivariate statistical analysis of home ownership, reported later in this chapter, adjusts for age, income, and other demographic differences between the veteran and
general populations. The result is that the difference in home ownership rates narrows to 5 percent between the two population groups.
VA loan program does not have a program outcome for home ownership rates for military personnel as it does for veterans, even though this group constitutes a significant portion of all users. Reported home ownership rates for active duty personnel vary widely, depending on data source, how military personnel are defined (active duty only and/or reservists on active duty), and how households are counted. For example, a significant number of active duty personnel live in military housing and should be excluded from the denominator in computing the homeownership rates for this group. However, the 1990 Census IPUMS does not provide data separately on military personnel living in group-quarters, preventing such an exclusion. Therefore, the numbers computed from IPUMS for active duty personnel are lower than the actual rates and the rates provided by the other data sources.
A study by Center for Naval Analyses6 compares the home ownership rates for Navy and Marine Corps personnel who live off-base with the home ownership rates for civilians. They find that although military home ownership rates are much lower than civilian rates,
differences between these two groups diminish or disappear as age increases. After controlling for age and other demographic factors that influence home ownership, they find that home ownership in the Navy is not significantly different from the home ownership in the 2
The complete 2000 Census data was not available through IPUMS at the time of this study.
3
It may exclude some veteran respondents. The publicly available data set collapses military employment and public administration employment into a single group, which is excluded from this analysis. See Appendix H for more detail.
4
“NA” means data not available.
5
It may exclude some civilian non-veteran respondents. The publicly available data set collapses military employment and public administration employment into a single group, which is excluded from this analysis. See Appendix H for more detail.
6
Heybey, B. (2000). Do Military Families Achieve the American Dream? A Comparison of Navy, Marine Corp and Civilian Home ownership Rates. Center for Naval Analyses.
civilian population. A recent study conducted by the RAND Corporation7 finds a
63.9 percent home ownership rate for military members and a 64.8 percent home ownership rate for the non-military population. RAND also finds that home ownership rates among military personnel were lower than non-military personnel across all educational and income groups.