ABSTRACT
The central feature of the economic environment that threatens housing and home ownership opportunity for the balance of the 1980s is a private-sector capital shortage. Housing was a convenient target for the frustration the nation felt as one policy initiative after another failed to put its economic house in order. Housing policy has always been governed, to one degree or another, by economic policy. The occupied housing stock grew at an average annual rate of 1.8%, while the adult population grew at only 1.1%. The federal deficits are the most visible source of this private-sector capital shortage. The extreme interest sensitivity of mortgage demand evoked by fixed-rate lending then produced an immediate housing-demand response to reduce aggregate demand. The economic environment created by this new policy framework will govern the tone and pace of housing and homeownership in the decade of the 1980s.
