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For two decades, the U.S. homeownership rate has been treated as a scoreboard of generational progress\u2014even as the topline number has barely moved and hides a widening age-based split beneath it. New research from the Federal Reserve Bank of Minneapolis suggests the story may actually be one of reversal, not stasis\u2014with a significant split along generational, even intra-generational lines.<\/p>\n
The Minneapolis Fed\u2019s new measure, called the homeowners-to-population ratio, or HPOP, counts individual adults rather than housing units. There\u2019s quite a difference from the traditional owner-occupancy rate: the former puts national homeownership at 65%, but HPOP finds the real figure is closer to 53%. For adults under age 35, the gap is even more severe. The standard rate says 37% of under-35 households owned their home in 2024; HPOP puts the true number at just 22%.<\/p>\n
The traditional 37% figure only reflects household heads\u2014\u201dabout a third\u201d of all adults under 35, one of the researchers, Erik Hembre, told Fortune. Once every adult in that age group is counted, the rate \u201cdrops down to 22% for everyone under the age of 35,\u201d he said. \u201cThat seems like a meaningful difference to me.\u201d<\/p>\n
\u201cMore than one in 10 U.S. adults live in owner-occupied homes without actually being owners themselves,\u201d researchers Hembre, Benjamin Horowitz, and Maxine Xu found, pegging the figure at 13.9% nationally. That\u2019s because the old measure only checks whether a housing unit\u2019s owner lives there\u2014it says nothing about the adult children, roommates, or aging parents who also live under that roof without owning any stake in it.<\/p>\n
Hembre said one figure inside that number surprised even him: 9% of all U.S. adults 18 and older live in an owner-occupied home as the child of the owner. \u201cTo me, that\u2019s a big number, and I didn\u2019t know it was that large beforehand,\u201d he said.<\/p>\n
And that blind spot isn\u2019t evenly spread across age groups: It falls hardest on the young, since they are disproportionately the ones living in homes their parents or partners own, which is exactly why the under-35 homeownership rate has looked so much healthier than reality for years.<\/p>\n
A cul-de-sac illustrates the illusion<\/p>\n
The Minneapolis Fed researchers illustrate the distortion with a hypothetical five-house cul-de-sac. Owner-occupancy there reads as 80%, since four of five houses have an owner living inside. But once you count all 14 adults living on the street, only half actually own a home. The rest are grown children, partners, or extended family folded into someone else\u2019s ownership statistic.<\/p>\n
The new measure also captures people the old one ignores entirely\u2014including nursing-home residents and students in dorms, who don\u2019t show up in owner-occupancy data at all. And it reveals just how bad the youngest cohort\u2019s trajectory has been over time: HPOP for 25-year-olds fell from 20% in 2006 to a low of 12% in 2015, and has recovered to just 14% by 2024\u2013nowhere near pre-financial-crisis levels, despite recent headlines suggesting a young-adult homeownership rebound.<\/p>\n
Hembre cautioned against reading too much doom into the youth numbers alone. <\/p>\n
\u201cIt\u2019s still true that most people, a majority of people, become homeowners at some point,\u201d he said. \u201cOur younger generation is still young. We don\u2019t quite know what the future holds for them yet.\u201d <\/p>\n
However, the data does suggest that \u201cat some point\u201d is arriving later than it used to, and later than the standard 35-year cutoff might imply. He said it\u2019s \u201ccompletely reasonable\u201d to look at other dynamics changing in the economy\u2014an aging society, medical advancements leading to longer lifespans\u2014and conclude that youth now lasts well into the mid-30s, in terms of homeownership.<\/p>\n
At one point in our interview, I asked Hembre if he was a baseball fan, and he quickly said yes, and then didn\u2019t disagree when I pointed out that his HPOP research resembles the invention of a stat called on-base percentage. Batting average was just about base hits, it simply didn\u2019t measure the core goal of getting on base as well as the metric that included drawing walks\u2014just like HPOP actually measures the head of household who also owns a home, instead of technically living inside an owned home.<\/p>\n
\u201cIt\u2019s why stats need to line up with what it is you care about as the outcome,\u201d he said. \u201cI\u2019m not saying the old measure was wrong\u2014batting average is still used,\u201d he said. \u201cBut we think that this is an improvement.\u201d<\/p>\n
Hembre also said the study\u2019s clearest surprise was how tightly housing affordability tracked the gap between HPOP and owner-occupancy at the state level. <\/p>\n
\u201cI was a little bit surprised at how strong that relationship was,\u201d he said. \u201cOften these correlations aren\u2019t as tight as you might think.\u201d <\/p>\n
High-cost states like Hawaii and California show the largest drops between the two measures, while low-cost states like North and South Dakota show minimal differences\u2014a pattern he attributed primarily to co-residency rates: how many young adults live with parents, or parents live with adult children. Still, he was careful not to overclaim causation. He said his paper was a \u201cfirst step\u201d and that more research on this was sure to follow.<\/p>\n
Meanwhile, older millennials are pulling away<\/p>\n
Generational researchers saw this fracture coming years before the Fed\u2019s housing data confirmed it. Back in 2015, consultant Jason Dorsey argued millennials were splitting into two distinct cohorts\u2014younger, more digitally native, financially strained versus older, more established, closer in outlook and means to Gen X. A decade later, that split looks less like a branding exercise and more like a housing-market fault line. Business Insider\u2018s Hillary Hoffower\u2014later of this parish\u2014reported in 2021 that the pandemic was deepening an intra-generational divide between the \u201cmillennial rich\u201d and the \u201cmillennial poor.\u201d Five years later, those divides are hardening.<\/p>\n
The\u00a0National Association of Realtors\u2019 latest generational trends report\u00a0found baby boomers remained the largest share of home buyers in 2026, while the overall first-time buyer share fell to a record low of 21%. Buried in that report is a widening split within the millennial generation itself. Younger millennials, age 27 to 35, saw their share of first-time buyers plunge from 71% to 60% in a single year. Older millennials, meanwhile, have become the highest-earning buyer segment in the market, posting a median household income of $132,700 and increasingly functioning as repeat, equity-leveraging buyers rather than first-timers, as\u00a0Fortune reported.<\/p>\n
That divergence tracks a broader wealth story that\u2019s been building for years. Millennials\u2019 total net worth has nearly quadrupled since 2019, rising from $3.94 trillion to $15.95 trillion by late 2024 \u2014 but roughly $2.5 trillion of that increase came directly from home-price appreciation among millennials who already owned property. The gains have been concentrated among those who bought early, disproportionately older millennials, rather than spread evenly across the generation. Younger millennials, meanwhile, remain locked out of the mechanism driving those gains. They also carry a heavier student-debt burden: 39% report student loans with a median $30,000 balance, compared with 27% of older millennials.<\/p>\n
That divergence is not entirely abstract. Hembre and I are both 42, going on 43\u2014right at the fault line the data describes. He said he got on the housing escalator \u201cjust perhaps a little too late as opposed to too early,\u201d and his experience dovetails with his own research on affordability. \u201cI certainly feel the issues.\u201d<\/p>\n
A pattern the Fed system\u2014and the broader wealth data\u2014has flagged before<\/p>\n
The Minneapolis Fed\u2019s findings echo warnings from elsewhere in the Federal Reserve system and beyond. Research from the\u00a0Federal Reserve Bank of New York\u00a0found adults under 40 held just 4.9% of total U.S. wealth as of 2019, despite making up 37% of the adult population\u2014although under-40 wealth has grown 80% between 2019 and 2023, far outpacing older age groups. Although that particular dataset is unclear on the growth of wealth for the 35-and-older cohort, separate Fed data survey data, compiled by Fidelity, suggests those gains likely skew toward the older end of that bracket: average net worth for people in their 20s ($139,243) remains a fraction of the $549,600 average for those 35-44.<\/p>\n
The\u00a0Federal Reserve Bank of Boston\u00a0has separately tracked a related trend: Older households are moving less often, while multigenerational living arrangements\u2014the very dynamic that inflates the traditional owner-occupancy rate\u2014continue to rise. The\u00a0Fed\u2019s own 2024 Survey of Household Economics\u00a0adds an income dimension, finding only 35% of adults earning under $50,000 owned a home, compared with 85% of higher earners.<\/p>\n
Taken together, the data suggest the story of millennial homeownership was never really about one generation lagging behind or catching up. It\u2019s about a fault line running straight through the middle of it\u2014separating an aging cohort now accumulating wealth the way boomers once did from a younger one that a flawed statistic made look far closer to catching up than it ever actually was.<\/p>\n
#millennial #generation #split #Fed #research #shows #edging #boomerstyle #wealth #falls<\/p>\n","protected":false},"excerpt":{"rendered":"
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