Homeownership has declined in the 1980s for the first time since World War II, according to a new congressional study. "In the decades following World War II you saw homeownership continue to climb, but in the '80s it headed downhill," said Sen. Lloyd Bentsen (D-Tex.). "And the reasons were ... that housing costs were up, but -- one of the big ones -- interest rates were up." Homeownership peaked at 65.6 percent of the population in 1980 and then began falling, hitting 63.9 percent last year, according to a study by a senior economist for the Joint Economic Committee of Congress. The study, released last week, found homeownership had fallen dramatically in the youngest age groups. In 1973, nearly one-fourth -- or 23.4 percent of people younger than 25 -- owned a home. In 1988 the rate was 15.5 percent. In other younger age groups, the situation is similar: 43.6 percent of 25- to 29-year-olds were homeowners in 1973, falling to 36.2 percent in 1988. For the 30- to 34-year-old group, 60.2 percent owned homes in 1973, dropping to 52.6 percent in 1988. And in the 35- to 39 bracket, the rate fell from 68.5 percent in 1973 to 63.2 percent in 1988. The average age of first-time home buyers now has increased to 32, up from 28 years old in 1980, the study said. Housing affordability is determined by several factors, including tax policy, income growth and housing prices, the study said. Rising house prices are reflected particularly in down payment requirements, the study said. In this decade alone, the average down payment for first-time home buyers has risen more than 50 percent, from $8,600 in 1981 to $13,000 in 1988. The other major hurdle to homeownership is interest rates, the study said. The interest cost for a $100,000 fixed-rate, 30-year mortgage at 6 percent, the prevailing rate in the 1960s, would have been $115,841, with a monthly house payment of $600. At 9 percent, the prevailing rate of the mid-1970s, the total interest cost would have been $188,810, with monthly payments of $802. But at 10.5 percent, the prevailing mortgage rate today, that interest cost would be $229,306 -- nearly double the interest cost of a 6 percent mortgage, and monthly house payments would be $915. "That's a tough hill to climb," said Bentsen, the chairman of the Senate Finance Committee, who is pushing for Congress to reinstate partial tax deductions for contributions to Individual Retirement Accounts. Under Bentsen's proposal, IRA contributions could be withdrawn without penalty for the purchase of a first home or for education expenses. Bentsen said his IRA plan, which has been offered as an alternative to President Bush's proposed cut in the capital gains tax, would give people an incentive to save money for their first home, a college education or retirement. "Now if we accomplish those things with savings and the withdrawal without any penalty, you'll have a great increase in the amount of capital in this country and that'll bring interest rates down. And that helps the entire country," Bentsen said.