We might be measuring American homeownership incorrectly
For decades, policymakers and other officials have used the same home ownership data to make policy decisions with deep implications for the country and its economy. What if the folks gathering that data weren’t asking the right question?
A new method of measuring homeownership rates suggests that little more than half of U.S. adults own a home, highlighting the affordability of housing and available stock. An economist told Straight Arrow that the analysis could influence housing policies.
The Federal Reserve Bank of Minneapolis released new calculations on how homeowners are represented, arguing that the current method doesn’t reflect how many people own their homes. Current ownership rates are calculated by the U.S. Census Bureau, representing the portion of households that live in owner-occupied homes.
According to the census, the rate for 2026 is 65.3%, as of April 28.
Economists with the Federal Reserve Bank said the actual homeownership rate is estimated to be 53%, a 12.3 percentage point difference from the Census estimate.
“There are more people living at home, particularly adult children living with their parents and the statistics from the Census Bureau did not adequately capture that,” Navy Federal Credit Union Economist Heather Long said.
Young people losing out on homes
The economists explained that in a hypothetical cul-de-sac with five homes and 14 residents, the census would count owners based on whether one person in the home owns it. So, in a house where one person owns it and they have a leased-roommate, both people are counted in the rate.
In the Fed’s new method of calculating the rates, it only considers the person who owns the home as the owner, and the renter is just a resident. The new rate is called the homeowners-to-population ratio. Economists said the new number better reflects the human aspect of homeownership as multiple working adults live in one home, and younger generations who take in their parents or vice versa.
They derive the new number from the share of adult homeowners in the total adult population.
“Calculations of the owner-occupancy rate leave out people who are living in group quarters — such as college dormitories, nursing homes, and correctional facilities,” the report’s authors wrote. “Our calculations of the HPOP include those groups and also account for discrepancies in the number of adults in renter households relative to homeowner households.”
Long said the share of adult children living with their parents is the biggest takeaway as it reflects a larger case of people buying their first home at 40 years old. The National Association of Realtors said in November that the share had dropped to a record low, adding that rates have halved since 2007.
“Delayed or denied homeownership until age 40 instead of 30 can mean losing roughly $150,000 in equity on a typical starter home,” Shannon McGahn, executive vice president of the realtors’ association, said in the release.
Homeownership rates guide policy
A rudimentary statistic like homeownership rates may not seem significant to some Americans, but it has been a big driver of social policies to address housing stocks, education enrollment and the economy.
At the national level, the Federal Housing Administration offers loan assistance programs for people to buy their first home. Each state has its own form of assistance, which includes a mix of down payment and closing cost assistance, fixed rates, grants and mortgage insurance, according to Experian.
Long noted that states like Arizona, Georgia and New Mexico experienced a housing boom and prices increased. It correlated with a higher-than-normal population growth the states experienced compared to others.
Part of that could be addressed in the bipartisan 21st Century ROAD to Housing Act that Congress passed. It automatically became a federal law on July 10 after President Donald Trump refused to sign the bill in order to force a vote on his election integrity proposal. The law restricts investors from buying up plots of single-family homes, establishes a federal pilot program for whole-home repairs, raises the cap on affordable housing from 15% to 20% and allows for certain federal grants to be used to construct new affordable housing, according to the Bipartisan Policy Center.
“This new metric underscores even more that we do not have enough starter homes in the United States,” Long said. “We need a massive building. We need to ‘build baby build’ on starter homes.”
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Ella Rae Greene, Editor In Chief
