Homeownership rate climbs most among people under 35 

While still hovering around multi-decade lows, the national homeownership rate in the U.S. improved modestly at the end of 2025 — particularly among the younger generations.

For the fourth quarter of 2025, the U.S. Census Bureau pegged the rate at 65.7%, the highest level of the year. However, last quarter's rate was no different from that recorded at the end of 2024 and remained below both the 2004 peak of 69.2% and the 25-year average rate of 66.3%. 

However, the fourth-quarter data comes with a caveat: Since the bureau did not collect data during the federal government shutdown that stretched from early October through mid-November, its latest report relies instead on partial information from November and December.

Younger homeowners see the biggest jump

One interesting nugget from the bureau's latest batch of data: The homeownership rate for individuals under 35 improved from 36.3% at the end of 2024 to 37.9% in the fourth quarter of 2025. The only other age group that saw a year-over-year uptick was among those 55 to 64, for whom the homeownership rate rose slightly from 76.3% to 76.7%.

This indicates that some modest improvements in affordability are helping younger buyers reenter the market, said Hannah Jones, senior economic research analyst at Realtor.com.

"Housing affordability remains strained, but conditions have improved over the past year as home price growth has largely stalled and mortgage rates have eased, bringing monthly payments down from recent peaks," Jones told Real Estate News via email.

Midwest boasts highest rate

The Midwest, which ranks as the region with the highest homeownership rate of 71.3%, is driving the overall uptick. This reinforces the idea that lower home prices and the cost of living are powerful factors, according to Jones.

"We've seen sustained interest in many Midwestern markets in recent years as buyers, both local and relocating, seek better value and more attainable paths to ownership," she said.

While the latest data shouldn't be interpreted as a complete snapshot of housing market health, Jones said it does provide some insight into what's ahead. She expects affordability to continue gradually improving in 2026, "which should help support homebuying activity and incremental gains in homeownership, assuming inventory continues to recover."

"Labor market conditions, particularly income growth, are critical, especially when wages grow faster than home prices, improving purchasing power and enabling more households to qualify," Jones said.

"Demographic forces also matter," she added. "As large cohorts of millennials and older Gen Z households move deeper into prime homebuying age, underlying demand for ownership remains strong, even if the timing of purchases continues to shift."

Breakdown by race shows growing disparity

In a separate report citing Census data, Redfin found that while the homeownership rate has ticked up for young white Americans, it has been dropping for young Black Americans. The report estimates that 14.2% of Black Gen Zers nationwide own a home, compared to 31.6% of white Gen Zers.

"Black millennials and Gen Zers are bearing the brunt of the racial homeownership gap because since they have reached homebuying age, the country has faced significant financial challenges and a major housing supply shortage," Redfin Chief Economist Daryl Fairweather wrote in the report.

"Young Black Americans started out behind their white counterparts because they're less likely to have property and money passed down from their families because of historical discrimination in housing and employment" and are now "coming of age during turbulent economic times that have impacted Black workers more than white workers," Fairweather added, citing gaps in wages, employment and credit scores.

Down payment assistance, first-time buyer programs and better access to fair, affordable credit could help younger Black buyers get a foot in the door, the report noted. Improvements in affordability are also expected to boost negotiating power.

What the data tells us about housing stock

While the number of total households increased in the past year, vacancy rates for rentals rose to 7.2%, according to the National Association of Homebuilders (NAHB). 

The rental vacancy rate has steadily increased since 2023, though it remains below the peak of around 11% during the Great Recession. Overall, this indicates that existing home supply is increasing, according to the NAHB, which could lead to further improvements in housing affordability.