Federal Reserve Bank of Minneapolis introduces new metric to track true homeownership rates

The Federal Reserve Bank of Minneapolis has published an analysis introducing the homeowners-to-population ratio (HPOP) as a significant alternative to the traditional owner-occupancy rate. While the widely cited national homeownership figure stands at 65 percent, this statistic tracks housing units occupied by owners rather than the individuals who own them. The new HPOP metric measures the actual share of adults who own their homes, revealing a national rate of 53 percent. This 12 percentage point discrepancy highlights how the traditional method often overstates individual ownership by grouping all residents in an owner-occupied home under a single household head.

The analysis, based on data from the U.S. Census Bureau’s American Community Survey, demonstrates that the HPOP provides a more nuanced view of economic well-being by accounting for all adults, including those living in group quarters such as college dormitories, nursing homes, and correctional facilities. Under the traditional model, these populations are excluded, whereas the HPOP includes them in the denominator. Additionally, the new measure identifies that 13.9 percent of U.S. adults live in owner-occupied homes but are not owners themselves, comprising adult children, older parents, and unrelated roommates who are often misrepresented in standard statistics.

Demographic breakdowns show substantial differences between the two metrics, particularly for younger generations. The owner-occupancy rate for households headed by adults under 35 was 37 percent in 2024, but the HPOP reveals that only 22 percent of adults in this age group actually own their homes. This lower figure reflects the exclusion of students and young workers living with parents or in dormitories from the traditional calculation. Conversely, the HPOP shows a clearer upward trend in homeownership among adults over 70, increasing by 5 percentage points between 2006 and 2024, a shift largely missed by the unit-based metric.

Geographic analysis indicates a strong correlation between housing costs and the divergence between the two measures. States with higher housing affordability, measured by the rent-to-income ratio, exhibit smaller gaps between their owner-occupancy rates and HPOP. For instance, North Dakota, the most affordable state in the nation, shows a difference of just 3.9 percentage points, causing its homeownership ranking to rise from forty-seventh to twenty-fourth under the new metric. In contrast, Hawaii, one of the least affordable states, displays the largest gap of 18.9 percentage points, underscoring how high costs drive adults to co-reside, thereby lowering the individual ownership rate relative to the housing unit rate.

The Federal Reserve Bank of Minneapolis argues that the HPOP is better suited for policy discussions regarding land use regulations, multi-generational living, and the long-term financial implications for young adults. By distinguishing between housing units and individual economic status, the metric allows researchers to explore how built environments influence living preferences and wealth building. The Fed has made HPOP estimates available for the nation, all 50 states, and metropolitan statistical areas from 2006 to 2024, disaggregated by age, race, ethnicity, and marital status to support more precise economic analysis.