Homeowner households drop for the first time since 2016
Meanwhile, renter households have jumped, Redfin reported, citing affordability and other issues. But lower home prices could “be the headline” in a few months.
Key points:
- The number of homeowner households was 86.2 million in the second quarter, down 0.1% compared to a year ago.
- “High mortgage rates and economic uncertainty have made it increasingly difficult to own a home,” a Redfin economist said, adding that people are also buying homes later.
- With home prices softening, however, there could soon be more opportunities for renters to start looking at listings again.
A combination of affordability challenges and lifestyle trends is having an impact on the U.S. homeowner population, a new Redfin report found.
The number of homeowner households was estimated to be 86.2 million in the second quarter, down 0.1% year-over-year. While the decline is small, it's the first drop in nearly a decade.
Renter households, on the other hand, rose 2.6% to 46.4 million — one of the largest increases during that time period, the report noted.
The decrease in homeowner households reflects the challenges would-be buyers continue to face, according to Chen Zhao, Redfin's head of economics research.
"America's homeowner population is no longer growing because rising home prices, high mortgage rates and economic uncertainty have made it increasingly difficult to own a home," Zhao said.
Delaying major life events
Economic issues aren't the only contributor: "People are also getting married and starting families later, which means they're buying homes later — another factor that may be at play," Zhao said.
That aligns with data from the National Association of Realtors' 2025 Generational Trends report, which found that the share of first-time buyers has fallen sharply in the past few years and the percentage of millennial buyers has plummeted.
Additionally, NAR's 2024 Profile of Home Buyers and Sellers indicated that the median age of first-time buyers was at a record high, and nearly three-quarters of buyers did not have children at home — also a record.
A pandemic surge; wide regional variance
While the last dip in homeowner households occurred in 2016, declines were even greater during the Great Recession between 2009 and 2015. Homeownership rates then shot up in 2020 and 2021, spurred by ultra-low mortgage rates.
And some areas are still homeowner-dominated. Among the major metro areas analyzed by Redfin, Baton Rouge, Louisiana, had the highest homeownership rate of 78.6%, followed by Cape Coral, Florida (74%), and Rochester, New York (73%). Los Angeles had the lowest homeownership rate of 46.4%, followed by New York City (49.4%) and San Diego (51.7%).
Will softening prices bring back buyers?
Homeownership rates could get a boost as prices begin to soften, however.
In his weekly report, Compass Chief Economist Mike Simonsen said the current average price per square foot has declined year-over-year, an indication that home prices are going down nationally.
The average price per square foot at the start of September was $217, according to data compiled by Simonsen with Altos Research. That's just a fraction lower than a year ago, but significantly down from around $225 in May.
"It's pretty clear: Sellers who want to sell now are pricing at a slight discount in order to be successful in this market," Simonsen said. "You want to be ahead of this curve, not behind it."
He expects overall sales prices to be down annually by the end of the year. The median home sale price over the past four weeks was $396,000, according to Simonsen's data, up 1.6% year-over-year.
"Prices are softening basically everywhere now, so in a few months it'll likely be the headline across the country as a whole," Simonsen said.