What is the Homeownership Rate?

Understanding What This Calculation Means for Buyers and Sellers

multi-ethnic couple in home
••• Photo: Roberto Westbrook/Getty Images

Deciding to become a homeowner can be a simultaneously exciting and terrifying milestone. There are multiple moving parts and things to consider throughout the process. You have to save up thousands of dollars, pay down existing debt and improve your credit scores to show lenders you're a capable and responsible borrower, just to name a few tasks. 

But that doesn't stop a large share of U.S. consumers from biting off a slice of the American dream. The national homeownership rate currently sits at 65.6 percent, according to the most recent data from the U.S Census Bureau. The rates broken down by region are: 

  • Northeast: 63.1 percent 
  • Midwest: 70.3 percent 
  • South: 67.4 percent 
  • West: 59.7 percent 

Americans age 65 and older have the highest homeownership rate at 79.3 percent. Millennials—those 35 and younger—have the lowest rate at 38.1 percent, though this is a notable bump from Q1 2020 when the rate was 37.3 percent. The homeownership rates for 35- to 44-year-olds, 45- to 54-year-olds, and 55- to 64-year-olds are 62 percent, 69.4 percent, and 75.7 percent, respectively.

Key Takeaways

  • The national homeownership rate currently sits at 65.6%, which is above the 50-year low it once reached, but below its pre-recession peak.
  • Americans age 65 and older have the highest homeownership rate at 79.3%. Millennials—those 35 and younger—have the lowest rate, at 38.1%.
  • The homeownership rate is calculated by dividing the number of homes that are owner-occupied by the total number of occupied households.

How Is the Homeownership Rate Calculated?

The homeownership rate is the percentage of U.S. homes that are owner-occupied. The rate is calculated by dividing the number of homes that are owner-occupied by the total number of occupied households. The Census Bureau releases this data in its "Quarterly Residencies and Homeownership" report, which includes info about the state of homeownership overall, about a month after each quarter ends. 

Historically speaking, the homeownership rate has risen above the 50-year low it reached during the second quarter of 2016 when it clocked in at 62.9 percent. Still, it's several percentage points away from its pre-recession peak of 69.2 percent. 

What About the Homeowner Vacancy Rate? 

The homeowner vacancy rate is defined as the proportion of homeowner inventory that is vacant and for sale. For the first quarter of 2021, the national homeowner vacancy rate was 0.9 percent, which points to a very low housing inventory available to potential homebuyers.

Housing inventory affects demand—when there's low inventory, demand is higher. High demand means higher home prices. Home prices jumped 13.2 percent in March 2021, according to the S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, which covers all nine Census divisions.

Another measure of housing inventory, the National Association of Realtors' existing-home sales report for May 2021, indicates there are 2.4 months' worth of homes for sale. NAR says six months' worth of inventory is considered a balanced market for both buyers and sellers.

“Rising interest rates along with high home prices and lack of inventory continues to push entry-level and first-time homebuyers out of the market,” says NAR chief economist Lawrence Yun. 

In June 2021, mortgage interest rates have steadily increased to 3 percent over the last three weeks and are expected to continue their upward trajectory. Freddie Mac's Primary Mortgage Market Survey reported the average 30-year fixed-rate mortgage is 3.02 percent. Six months ago in December, the rate was a low 2.65 percent.

Taking all of these statistics into consideration, home sellers seem to have the upper hand in the housing market. Buyers have to go the extra mile to stand out and have their home offers taken seriously. 

Where Can You Find More Data?

If you want to keep an eye on the national homeownership rate, visit the U.S. Census Bureau's website. The quarterly report also provides data on the homeownership rate by age group, race/ethnicity, and region. Current and historical data can be found on the Census Housing Vacancies and Homeownership page.