Home Ownership Rate Falls to Five-Year Low

The Census Bureau released its latest quarterly report for Q1 2025 showing the latest homeownership rate is at 65.1%, the lowest level in over five years. The seasonally adjusted Q4 number is at 65.2%, down 0.5 percentage points from the Q4 2024.

Here's an excerpt from the press release:

National vacancy rates in the first quarter 2025 were 7.1 percent for rental housing and 1.1 percent for homeowner housing. The rental vacancy rate was higher than the rate in the first quarter 2024 (6.6 percent) and not statistically different from the rate in the fourth quarter 2024 (6.9 percent).

The homeowner vacancy rate of 1.1 percent was higher than the rate in the first quarter 2024 (0.8 percent) and virtually the same as the rate in the fourth quarter 2024 (1.1 percent).

The homeownership rate of 65.1 percent was not statistically different from the rate in the first quarter 2024 (65.6 percent) and lower than the rate in the fourth quarter 2024 (65.7 percent).

The Census Bureau has been tracking the non-seasonally adjusted data since 1965. Its seasonally adjusted version only goes back to 1980. Here is a snapshot of the non-seasonally adjusted series with a 4-quarter moving average to highlight the trend. The latest 4-quarter moving average is at 65.5%, its lowest level since Q1 2022.

Home Ownership Rate

The COVID-induced recession led to a brief but sharp increase in homeownership due to drastically reduced consumer spending. However, the homeownership rate quickly declined. The prevailing view is that this downward trend is driven by elevated mortgage rates, rising home prices, and a limited supply of entry-level homes that would attract first-time buyers.

Here is the YoY version of the chart going back to 1965. The latest year-over-year change stands at -0.76%, the lowest level since Q3 2021.

Homeownership Rates Across the Globe

The snapshot below gives us a crude comparison of the US homeownership rate compared to some select other countries. Our data source is a subset of the over 70 countries in this Wikipedia entry on homeownership. We included the more populous outliers at the top and bottom, China at 96.0% (2022) and Switzerland at 42.3% (2023).

Home Ownership Rate by Country

The underlying factors in the chart above are quite complex: Residential real estate affordability, financing options, household income distributions, demographics, and cultural values, to mention some of the more obvious.


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