Homeownership Rate Dips in Fourth Quarter Amid Housing Affordability Woes

The Census Bureau’s Housing Vacancy Survey (CPS/HVS) reported the U.S. homeownership rate declined to 65.7% in the last quarter of 2023, amid persistently tight housing supply and elevated mortgage interest rates. This is a 0.3 percentage-point drop from the third quarter (66%) and 3.5 percentage points lower than the peak of 69.2% in 2004. The rate remains below the 25-year average rate of 66.4% amid a multidecade low for housing affordability conditions.

The homeownership rate for those under 35 decreased 0.6 percentage point to 38.1% in the fourth quarter of 2023. This is the largest decline among all age categories, as this age group is particularly sensitive to mortgage rates and the inventory of entry-level homes.

The homeownership rates of adults in all age groups decreased over the last year, except those aged 55-64 and 65 years and over. The homeownership rates in the 45-54 age group decreased 0.3 percentage point from 70.6% to 70.3%. Next, were households aged 35-44, who experienced a modest 0.2 percentage point decline. However, homeownership rates of those aged 55-64 showed an increase of 0.3 percentage points.

NAHB Principal Economist Na Zhao provides more in this Eye on Housing post.