The American dream of home ownership faded somewhat during the roaring '80s, reports a recent issue of Money magazine.
It was the first decade since the '30s when the percentage of households owning their own homes actually declined -- from a high of 65.6 percent in 1980 to 64 percent in 1989.
Young families, faced with the dual obstacles of making enough money to qualify for a mortgage plus coming up with enough savings for a down payment, were hardest hit.
The percentage of families headed by 25 to 34-year-olds who owned their own houses dropped from 52.3 percent in 1980 to 45.2 percent in 1989.
Harvard's Joint Center for Housing Studies estimates that 2 million more individuals and families would own their homes today if the ownership rate had remained at its 1980 peak.
Most housing experts expect the home ownership rate to regain its lost ground. The current slump in housing prices will help by making homes more affordable.
And as baby boomers' incomes grow along with their age and work experience, many families who postponed buying in the 1980s will be able to make the transition from renters to owners in the 1990s.
But, says William Apgar, associate director at Harvard's Joint Center for Housing Studies: "It may take us the entire decade to get back (to) where we were before the decline. The income growth needed to make homes affordable won't happen overnight, and the current low economic growth will slow things down too."
Homeowners in the '90s shouldn't expect the giddy gains for the '70s, when starter home prices beat inflation by nearly three percentage points a year. But they can count on doing better than in the 1980s when values actually declined 0.4 percent a year after inflation.
Overall, housing experts believe house values will rise along with inflation or perhaps beat it by a percentage point or so a year. Those who buy in distressed areas that later rebound may do even better.