Research from the Federal Reserve Bank of Minneapolis indicates that only about 53% of U.S. adults own homes, significantly lower than the commonly cited 65% homeownership rate. This new measure, known as the homeowners-to-population ratio (HPOP), calculates the share of adults who own a home, contrasting with the traditional method used by the U.S. Census Bureau, which measures the share of occupied homes where the owner resides.
The Census measure can misrepresent homeownership, as it counts households with adult children or relatives living with owners as owner-occupied, despite those individuals not owning the property. According to the Minneapolis Fed researchers, approximately 14% of U.S. adults live in owner-occupied homes without owning them.
Erik Hembre, a senior economist at the Minneapolis Fed and co-author of the report, emphasized the importance of clarity in discussing homeownership rates, stating that the commonly cited figure can mislead people into believing that two-thirds of adults are homeowners.
Francesco D'Acunto, a professor of real estate at Georgetown University, noted that the HPOP measure highlights the increasing barriers to homeownership in the U.S. He indicated that the new findings suggest the issue of affordability is more severe than previously understood.
The HPOP measure shows that actual homeownership rates are lower across all U.S. states, particularly in states with high housing prices. For instance, in California, the HPOP is 41.2%, compared to an owner-occupancy rate of 55.9%. In New York, 43.3% of adults own homes, while 54.3% live in owner-occupied housing.