Seeking a more accurate picture of homeownership rates in America, the Federal Reserve Bank of Minneapolis has developed a new method of calculating homeownership. The “homeowners-to-population ratio” (HPOP) considers the status of each individual adult instead of considering each housing unit. The problem with the older way of calculating is that it doesn’t account for the social trends that explain the way Americans are living today.
As young Americans delay adulthood by moving back in with their parents after graduating college, one effect is that statistics on homeownership rates appear deceptively high. Property ownership as typically calculated treated each home as a single datapoint. Imagine a house owned by two parents. Their son and daughter both return home after graduation. But because the owners reside in-house rather than renting it out, the home is designated as a 100 percent “owner-occupied unit.” Thus, even though two of the four adult residents are not homeowners, the statistics do not consider that those two adults do not own a home.
In this house, mom and dad are homeowners, while the two adult children just live there, thereby yielding a 50 percent homeownership rate under the new HPOP metric. When this correction is applied across the country, we see that the true number of Americans who own homes is much lower than we had originally thought.
While the nationwide homeownership rate is reported at 65 percent, the HPOP number is only 53 percent. For young adults, the situation is even worse. On paper, 37 percent of adults under 35 were said to be homeowners in 2024. When adjusted for HPOP, the rate drops to just 22 percent. Homeownership is increasingly less common for Gen-Z and younger millennials. In just the past two decades, the percentage of young adults who own homes has fallen by a full eight points. Since its peak in 1980, the young adult homeownership rate has been cut in half.
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