Homeownership Rates for Households Aged Under 35 Fell to 38.5%

The Census Bureau’s Housing Vacancy Survey (CPS/HVS) reported the U.S. homeownership rate at 65.9% in the second quarter of 2023, amid persistently tight housing supply. The homeownership rate remained statistically unchanged from the first quarter reading (66%).  Compared to the peak of 69.2% in 2004, the homeownership rate is 3.3 percentage points lower and remains below the 25-year average rate of 66.4%.

The homeownership rate for households aged less than 35 decreased to 38.5% in the second quarter of 2023, as affordability is declining for first-time homebuyers amidst elevated mortgage interest rates and tight housing supply.

The covid-induced data collection restrictions have ended in all areas as of the last quarter of 2021. However, technical issues involved with data collection changes limit useful comparisons of the data during the pandemic with the prior data series. We have particularly noted the homeownership rate data for the last three quarters of 2020 with separate dots below to denote these technical issues. We encourage readers to consider these data points separately from the remaining data series. Nonetheless, the first three quarters of 2021 likely returned the series to a more apples-to-apples comparison with the prior history of the series.

The national rental vacancy rate dipped to 6.3%. The homeowner vacancy rate is still hovering near the lowest rate in the survey’s 66-year history (0.7%), signaling a supply-constrained housing market.

Households aged less than 35 experienced a modest 0.6 percentage point decrease in the homeownership rate. The homeownership rate among households aged 35-44 registered the largest gains among all age groups, from 61.9% to 63.1%, followed by householders aged 55-64 with 0.4 percentage point increase from 75.1% to 75.5%. The homeownership rate of households aged 45-54 edged up a 0.2 percentage point. Households aged 65 and older saw their homeownership rate decrease to 78.9% in the second quarter of 2023 from 79.3% a year ago.

The housing stock-based HVS revealed that the count of total households increased to 130.1 million in the second quarter of 2023 from 128.2 million a year ago. The gains are largely due to strong owner household formation (1.4 million increase), while renter households increased 471,000 as well.