Fed measure shows younger adults own homes at lower rates than reported

A new measure from the Federal Reserve Bank of Minneapolis shows U.S. homeownership is lower when researchers count adult owners rather than owner-occupied housing units. The gap is especially wide for adults under 35, a finding that helps explain why younger millennials and Gen Z adults appear further from homeownership than standard figures suggest.

The Minneapolis Fed’s homeowners-to-population ratio, or HPOP, puts national homeownership near 53%, compared with about 65% under the traditional owner-occupancy rate. For adults under 35, the standard measure showed 37% of households owned their homes in 2024, while HPOP put the share at 22%.

Erik Hembre, one of the Minneapolis Fed researchers, told Fortune the higher figure counts only household heads, who make up about a third of adults under 35. Once every adult in the age group is included, he said, the rate falls to 22%, a difference he called meaningful.

What the old measure misses

Researchers Hembre, Benjamin Horowitz and Maxine Xu found that 13.9% of U.S. adults live in owner-occupied homes without owning them. That group includes adult children, partners, roommates and older relatives who live in a home owned by someone else.

Hembre told Fortune that one finding stood out: 9% of all U.S. adults live in an owner-occupied home as the owner’s child. He said he had not expected the figure to be that large.

The Minneapolis Fed researchers illustrated the difference with a hypothetical five-home cul-de-sac. Four of the five homes are owner-occupied, producing an 80% rate under the traditional measure, but only seven of the 14 adults living there own homes, cutting the people-based rate to 50%.

The HPOP measure also includes people left out of owner-occupancy data, such as nursing-home residents and students in dorms, according to the Minneapolis Fed. For 25-year-olds, HPOP fell from 20% in 2006 to 12% in 2015, then recovered only to 14% by 2024.

Hembre told Fortune most people still become homeowners at some point, and younger adults may yet do so. He also said it is reasonable to view homeownership youth as extending into the mid-30s as lifespans lengthen and other social patterns shift.

Millennials are splitting by age and wealth

Other housing data point to a divide inside the millennial generation. The National Association of Realtors’ 2026 generational trends report found baby boomers remained the largest share of home buyers, while first-time buyers fell to a record-low 21% of all buyers.

In the same report, younger millennials ages 27 to 35 saw their share of first-time buyers fall from 71% to 60% in one year. Fortune reported that older millennials had become the highest-earning buyer group, with median household income of $132,700, and were increasingly repeat buyers using existing equity.

Yahoo Finance reported that millennials’ total net worth rose from $3.94 trillion in 2019 to $15.95 trillion by late 2024. About $2.5 trillion of that increase came from rising home values for millennials who already owned property, concentrating gains among those who bought earlier.

The same wealth divide shows up in debt figures cited in the reporting. Younger millennials were more likely to report student loans, at 39%, with a median balance of $30,000, compared with 27% of older millennials.

Other Fed data show related pressures

The Federal Reserve Bank of New York found adults under 40 held 4.9% of U.S. wealth in 2019 while making up 37% of the adult population. It also found their wealth grew 80% from 2019 to 2023, faster than for older groups.

Separate Fed survey data compiled by Fidelity showed average net worth of $139,243 for people in their 20s, compared with $549,600 for people ages 35 to 44. The Federal Reserve Bank of Boston has also tracked older households moving less often and multigenerational living becoming more common.

The Fed’s 2024 Survey of Household Economics found homeownership varied sharply by income: 35% of adults earning under $50,000 owned a home, compared with 85% of higher earners. Taken together, the figures show younger adults face a steeper path to ownership than the traditional homeownership rate implies.

This story draws on original reporting from Fortune.