Homeownership in the us: less than half of adults own a home

A new Federal Reserve study reveals a stark reality about homeownership in the United States - only around 53% of adults own a home, significantly lower than the commonly cited rate of 65%.

Homeownership gap: census vs. fed

The difference lies in the way each organization measures homeownership. The traditional homeownership rate tracked by the U.S. Census Bureau measures the share of occupied homes in which the owner lives. This approach can create an illusion that everyone in a household is a homeowner, even if not all residents own the property.

Contrastingly, the Federal Reserve Bank of Minneapolis's new homeowners-to-population ratio, or HPOP, calculates the share of adults who actually own a home. This provides a clearer picture by distinguishing between the share of homes occupied by their owners and the share of adults who own property.

According to HPOP, the commonly cited 65% homeownership rate is in fact a misrepresentation. The study found that about 14% of U.S. adults live in owner-occupied homes without owning the property. This includes adult children living with parents, siblings, or parents living with adult relatives, as well as people residing with roommates who own the property.

Implications and challenges

The researchers argue that policymakers must measure the right thing to design effective policies. A senior economist at the Minneapolis Fed, Erik Hembre, told CBS News that improper policies could result from flawed data based on the traditional method of tracking homeownership rates.

Moreover, the new measure underscores the growing barriers to homeownership in the U.S. Francesco D'Acunto, a real estate professor at Georgetown University not involved in the study, stated that HPOP highlights the affordability crisis in the housing market, with homeownership rates lower in every state compared to previous estimates.