How Many Homeowners Are There in The US in 2023? A Deep Dive into the Stats and Trends
The dream of homeownership remains alive and well in America. But how many people are currently realizing that dream by owning their home? What do the latest housing market statistics reveal about current homeownership rates and trends?
As an experienced real estate analyst, I‘ve dug deep into the numbers to provide a comprehensive picture of the homeowner landscape across the country. Whether you‘re a prospective buyer curious about ownership data or just interested in economic trends, read on for key insights.
- Current Homeownership Statistics
- Recent Changes in Homeownership Rate
- How Rates Vary by Location, Age, Race
- US Compared Globally
- Financial Benefits of Owning
- Market Outlook for Prospective Buyers
Current Homeownership Statistics: Who Owns America‘s Housing?
Let‘s start with the latest data on the total number of homeowners nationwide. According to the US Census Bureau, there were approximately 79.5 million owner-occupied housing units as of Q4 2022. This represents about 63% of total households in the country.
To put it another way: nearly 2 in 3 households own their homes.
This equates to a homeownership rate of 65.8% as of late 2022. While down from the peak of 69% in 2005 during the housing boom, it has rebounded from a low of 62.9% in 2016 after many people lost homes during the foreclosure crisis.
In raw numbers, the number of owner-occupied households has increased by over 2 million from 2020 to 2022 as buyers took advantage of low mortgage rates during the pandemic. This suggests ownership is regaining ground lost after the Great Recession.
Looking closer, homeownership rates vary across different metro areas and cities:
Metro Area – Homeownership Rate
Milwaukee, WI – 74.4%
Minneapolis, MN – 73.1%
Buffalo, NY – 71.3%
Detroit, MI – 69.2%
Cincinnati, OH – 68.1%
On the flip side, areas with predominantly rental housing like New York, San Francisco, Los Angeles have much lower rates ranging from 48% to 55%. Cost of living is a key factor in these pricier cities.
There are also sharp divides based on demographics like age and race. According to the National Association of Realtors, homeownership rates as of late 2022 stood at:
- Age 65+ – 80.4%
- Age 55-64 – 77.5%
- Age 45-54 – 67.9%
- Age 35-44 – 62.6%
- Under 35 – 37.4%
And across racial groups:
- White – 76.3%
- Asian – 61.5%
- Hispanic – 51.1%
- Black – 44.6%
So older, white households generally have the highest ownership levels, while younger and minority groups trail despite recent modest gains. Let‘s analyze the key trends driving these homeownership rates over the past decade…
Factors Impacting Changes in the US Homeownership Rate
The US homeownership rate declined notably from its 2004 peak during the housing crisis, hitting bottom around 63% in 2016. Since then, it has rebounded partially thanks to a stronger economy and job market. Still, rates remain below historical highs due to shifts in demographics, housing affordability, lending standards and economic conditions.
Here are some of the key factors that moved the needle:
- Millennials (ages 25-40) are buying homes later than prior generations due to student debt burdens, saving for downpayments, and lifestyle preferences. Most experts estimate this generation will eventually catch up and own at similar rates as they age and pair off.
- Immigrants have become a larger share of new households and tend to have lower homeownership rates around 50%, pulling down the national average. Cultural factors and language barriers likely contribute.
- Tighter lending standards after the subprime mortgage crisis have made it harder for those with lower incomes, self-employment or credit issues to qualify for financing. Downpayment requirements are also steeper now.
- Years of home prices rising faster than wages have eroded affordability, especially for first-time buyers trying to save up enough to enter the market.
- Building activity has lagged household formation, resulting in inadequate supply of entry-level homes. Investors have also bought up excess inventory of cheaper properties as rental investments.
- Economic uncertainty and recessions make some households reluctant to buy until greater stability returns. High inflation has also deterred buyers who can‘t keep up with price gains.
Looking ahead, most economists see the US homeownership rate increasing modestly as Millennials hit prime buying age and the market stabilizes. But a return to 2004 highs appears unlikely given the structural shifts.
How Does the US Homeownership Rate Compare Globally?
Despite the post-recession decline, the US still has one of the highest homeownership rates among developed nations. For example, Canada‘s ownership rate stands at 66.5%, the UK is at 65.3%, and Germany at 51.4% as of 2020.
In fact, the US rate exceeds most peer countries, attributed in part to:
- Generous tax benefits for mortgage interest and property taxes that are less common abroad
- Larger geographic size and lower population density providing more land for new building
- A private market-driven mortgage system with access to global capital rather than solely public funding
- A cultural preference for ownership and detached, single-family homes
Among 29 developed nations tracked by the OECD, the US had the 6th highest homeownership rate as of 2020. The countries with even higher levels include:
- Romania – 96.8%
- Singapore – 90.8%
- Greece – 73.6%
- Italy – 73.4%
- Canada – 66.5%
Conversely, other advanced economies like Germany, Switzerland, Denmark and Japan have substantially lower ownership rates under 55%.
Clearly America‘s long-standing policy support and societal focus on homeownership puts it among the leaders globally in terms of ownership levels. But there‘s still room to improve access and affordability to keep pace with peer nations.
The Financial Benefits of Homeownership
Despite rising mortgage rates and costs, owning a home remains a key wealth-building tool for many American families. The financial benefits include:
Potential to Build Home Equity
As owners pay down mortgage principal and home values appreciate, they build equity that can serve as a nest egg later in life. US home prices were up 33% nationally from 2020 to 2022, though growth is slowing.
Eligible homeowners can deduct mortgage interest and property taxes from federal income taxes. Gains from selling a home are also usually tax-free up to $500,000 for married filers.
Saving Money Versus Renting
Owners build equity rather than paying rent to a landlord. And buying often costs less than renting a similar property over the long term in many housing markets.
Freedom to Customize
Owners can freely renovate or make additions like a backyard deck that might not be permitted in a rental. This allows creating one‘s ideal living space.
Owners don‘t face risks like a rental lease non-renewal or rent hikes down the road. Homeownership offers security and stability to comfortably settle down.
Building an Asset to Pass Down
For many, owning a home is about leaving an inheritance or asset behind to benefit heirs, unlike pouring money into rent.
Of course, homeownership also comes with costs and risks like maintenance, insurance, and property taxes that renters avoid. But for a majority of Americans, the financial advantages outweigh the tradeoffs.
Housing Market Outlook for Prospective Buyers
For prospective home buyers, the market remains challenging despite cooling somewhat from the frenzied 2021 peak. Key conditions include:
- Home prices up 33% nationally since 2020, far outpacing wage growth. Median home values exceed $357,000.
- Inventory remains tight, with just 1.6 months supply of existing homes for sale – well below the balanced level of 6 months.
- Mortgage rates have doubled since 2020 to around 6.5%, driving up monthly costs.
- Downpayment savings lag as high inflation erodes excess cash. Younger buyers lack funds.
As a result, first-time home ownership likely faces headwinds until inventory, prices and rates stabilize at more affordable levels. But strong employment and demographics should support ownership rates longer-term.
The Bottom Line
Homeownership remains an aspirational goal for many in America, driven by financial benefits and the stability it provides. Despite fluctuations, nearly 80 million US households – or about 63% – currently own their home. Rates peak among older, white households but lag for younger and minority demographics. While the cost of buying today is a hurdle, ownership still offers long-term wealth-building value.