The Housing Affordability Problem Is Creating A Nation Of Renters

Housing affordability is at or near an all-time low and the Fed is partly to blame due to its aggressive rate hikes in such a short time frame. The Federal government is also partly to blame due to excess stimulus spending during the pandemic.

However, this is not a post about who is to blame for low housing affordability. There are plenty of factors, such as demographics and underbuilding, that has made homeownership out of reach for many first-time homebuyers. Instead, this is a post about trying to understand what the Fed ultimately wants and how consumers can benefit accordingly.

First, let's look at some housing affordability charts to see how bad things have gotten, particularly for first-time buyers.

Charts Explaining The Housing Affordability Problem

The first chart is from the National Association Of Realtors, which shows the Housing Affordability Index since 1990. As of July 2023, the Housing Affordability Index is at an all-time low.

historical housing affordability index by the National Association of Realtors

The next chart, created by Bloomberg, shows the Housing Affordability Index in a different way. It looks much more dramatic, which many people love to see.

historical housing affordability index by the National Association of Realtors

The next chart from the Atlanta Fed shows the U.S. median housing payment as a percentage of median income from January 2006 to May 2023. The percentage has risen to an all-time high of 43.8%.

US median housing payment as a percentage of median income

The next chart shows the mortgage payment to income ratio between 2000 – 2023. The percentages are lower due to putting down 20% and excluding taxes, insurance, and PMI. If you put less than 20% down, you have to pay PMI.

If you follow my 30/30/3 home buying rule, you should limit the percentage to 30%. But I'm only including the mortgage. So this chart's percentages have always fit my rule.

Mortgage payment to income ratio 2000 - 2023 according to the NAR

The final chart from the Federal Home Loan Mortgage Corp and the NAR, compares the average 30-year fixed-rate mortgage to the Housing Affordability Index since 1981. The chart also highlights periods of previous recessions.

There is clearly an inverse relationship between mortgage rates and affordability. As mortgage rates go up, affordability goes down. From 1980 to 2012, a decline in the average 30-year fixed-rate mortgage made houses more affordability.

However, from 2012 through 2021, home prices surged higher, making houses less affordable. Then housing affordability declined dramatically after 2022 as home prices stayed largely elevated while mortgage rates more than doubled.

Historical 30-year fixed mortgage rate average compared to housing affordability index and historical recessions

The Fed May Want To Create A Nation Of Renters

It is clear from the data that housing affordability is low in America. Good thing roughly 66% of Americans own homes. In addition, roughly 40% of American homeowners have no mortgage. As a result, housing affordability is high for the majority of Americans no matter how high rates go.

On the other hand, first-time homebuyers are bearing the brunt of higher mortgage rates and higher home prices. Younger millennials and Gen Z are getting shut out of homeownership the most.

The Fed, in its infinite wisdom, knows this. Yet, they have raised the Fed Funds rate 11 times since 2022 and may even raise rates one more time in 2023. This is also despite the 10-year bond yield rising aggressively, thereby doing a lot of the Fed's work to slow down borrowing and investments.

The Fed can say it wants to fight inflation so that the middle-class Americans can more comfortably afford to live. However, we should consider the idea that the Fed may actually want to increase the number of renters to support the growing investor class. Actions speak louder than moral suasion.

By raising rates aggressively, fewer middle-class Americans and younger Americans can afford to buy and continue paying for a home. Therefore, those Americans who are priced out will have no choice but to rent.

A growing division is opening up, which could have large socioeconomic consequences a generation from now.

Home Price Appreciation Since 2020

The Fed already knows home prices around the country have risen substantially since 2020, the year the pandemic began. By raising the Fed Funds rate aggressively, the idea is to slow down home price appreciation or cause home prices to decline. This way, homes become more affordable.

However, by aggressively raising interest rates, the Fed has temporarily created a scenario where both home prices and mortgage rates are high. When you have the vast majority of homeowners sitting on sub-3% mortgage rates, they are less motivated to sell. In normal downturns, home prices tend to fade slowly. As a result, more Americans are forced to rent for longer.

Below is a chart put together by Lance Lambert of Fortune magazine, highlighting the housing markets with the largest price declines since the 2020 peak.

It is a GOOD thing that home prices are falling around the country. The pace of price appreciation growth was unhealthy.

With not enough supply and rock-bottom mortgage rates, bidding wars were common. Plenty of folks paid more than they could comfortably afford for a home or constantly missed out on their dream homes. This is both financially dangerous and emotionally frustrating.

However, if home prices decline too much, such as greater than 10% a year for three years, many recent homebuyers will get wiped out. In turn, this could cause a cascading effect on the nation's housing market as foreclosures and short sales suppress prices.

A Symbiotic Relationship Between Homeowners And Renters

The Fed sees all the data, analyzes the data, and then makes its decision on interest rates. Making sure the economy doesn't get too hot or too cold is a tough job with plenty of errors.

The Fed knows that ~66% of Americans own homes. And with a growing percentage of Americans owning more than one property (~16%) to earn rental income for retirement, the Fed also knows it needs to boost the number of renters to keep rents up.

Increasing the supply of renters helps REDUCE the federal government's burden of taking care of our oldest generations. Social Security is already underfunded by ~25% and no politician is willing to raise the full retirement age or cut benefits. Meanwhile, Medicare and other government benefits are also costly to run.

If a retiree with rental properties can see steady increases in rent that keep up with inflation, then the retiree will depend less on the federal government to survive. This frees up more government resources for the most needy.

While my theory might sound far-fetched, since I started writing on Financial Samurai in 2009, I've clearly seen an increase in the prevalence of owning rental real estate. With lower yields and higher volatility, stocks are becoming less popular as a source of retirement income and wealth.

Annual Rent Cost To Gross Income Ratio

Some you might wonder why are there even homes being sold with housing affordability so low. Wouldn't it be better to just save money by renting? In short, yes. Renting is usually more affordable in the short run. However, in the long run, renting is usually more costly because you don't build any equity.

Below is the annual rent cost to gross income ratio between 2013-2023. The percentage has also increased to a 20-year high of 40.6%. Given renting is the alternative to owning, now the cost of homeownership doesn't look too bad.

Annual rent cost to gross income ratio between 2013-2023

Build Your Rental Property Portfolio

The Federal Reserve purposefully making homeownership further out of reach for younger generations is real-time evidence the Fed is on the homeowner's side.

We already know the federal government is on the homeowner's side due to generous tax benefits, such as the $250,000 / $500,000 tax-free profit exclusion rule.

Given we clearly understand who the Fed and the federal government favor, everyone's goal should be to own their primary residence and own at least one rental property. This way housing affordability won't be a big issue in the future.

Here are the steps to take:

  • Multiply your target home's price by 20% to come up with the downpayment amount
  • Make it a goal to save that amount in a realistic time frame, e.g. 3, 5, 10 years
  • Invest your downpayment wisely
  • Focus on your career by getting paid and promoted
  • Know what you want to do for the next 10 years
  • Understand where you want to live for at least three years
  • Reduce consumption on unnecessary things and experiences until you get neutral real estate
  • Tap your parents for a bridge loan if necessary
  • Invest in public REITs or private real estate funds as a hedge if real estate prices go up
  • Look for local economic catalysts in the area you want to buy

If mortgage rates revert back to their 40+-year trend, the demand for real estate goes up, which will push up prices. If interest rates stay high for a while, the demand for rental property goes up, which will push up rents. This is especially true if the labor market is strong.

Of course, real estate prices may soften or decline when mortgage rates rise. But so long as prices don't crash, the rental property owner should come out ahead.

Here’s a great video that compares rent growth to income growth over time. Renting over the long run can become very costly!

Cash Flow Is More Important Than Property Values

Long-term rental property owners care more about rent prices than rental property prices.

If you are a retiree, your goal is to generate as much cash flow as possible to pay for your desired living expenses. How the value of your rental property portfolio changes is inconsequential if you don't plan to sell.

If you are a homeowner without rental property, the changes in your home's value over time are also inconsequential if you don't plan to sell. You have to live somewhere.

To explain further why your rental property's value is not as important as the rent generated, let me use myself as an example.

A Decline In Rental Property Value Doesn't Affect My Lifestyle

My rental properties have likely declined in value by as much as 10% since 1H 2022. Psychologically, this is disappointing. However, my hold duration target is until 2043, when my kids are 23 and 26.

Over the next 20 years, it doesn't matter how much or how little my rental properties appreciate or depreciate in value. My #1 goal is to have good tenants pay as close to market rate as possible. I rely on my rental income to pay for more than half of my family's living expenses.

If the rental properties appreciate in value, literally nothing in our lives changes. Their values are largely fixed in my net worth tracker. For retirees or jobless folks, cash flow is more important than net worth.

Although my rental properties have decreased in value, a couple properties' 2023 rents have increased by 2.5% and 4.7%, respectively. A combined $500 increase in cash flow serves a greater purpose than any increase or decrease in property values.

I'm not borrowing against the properties. In fact, it would be best if most homeowners had properties worth less to pay less in property taxes.

Helping Maintain Our Lifestyle And Maybe The Next Generation

In 20 years, my rental properties will have served its purpose of helping fund our lifestyles. Our main goal is to have as much optionality as possible given life is so short. If we want freedom, then we'll have it. If we find a new exciting job, then we'll try it out for a bit, etc.

After 20 years, my rental properties will be used to provide career insurance for my children through property management if they can't get regular jobs. With the world getting more competitive every year, I suspect my children will have a difficult time launching.

Alternatively, my rental properties can serve as affordable housing for my children if they can't get jobs or can't earn enough to make a decent living. I'll make them pay rent, but at no more than 30% of their annual income.

I'm hoping both kids grow up to be independent adults who can find great jobs and afford their own homes. But just in case they can't, my rental properties will be waiting for them.

If they can become independent adults without our help, then I may finally sell the rental properties or keep managing them until death. This is the power of optionality.

Housing Affordability Is A Long-Time Fear

In 2002, a year after I came to San Francisco, I started getting subs at an amazing deli in the Cow Hollow neighborhood. I talked to the the sandwich shop owner and asked if he owned or rented the store.

He told me, “Unfortunately I pay rent. I had an opportunity to buy the building eight years ago, but thought it cost too much at the time. If I did, I would be making far more in rental income than I do selling sandwiches! Today, I can no longer afford to buy such a building, so I will continue to make sandwiches for the rest of my life.”

That conversation struck fear in my heart that I might be priced out of the housing market too. I was 25 years old at the time and attending Berkeley part-time for my MBA. Given I knew I would live in San Francisco for at least three years, I decided to buy a condo the week of my 26th birthday in 2003.

I still own the condo today. It is paid off and generates about $3,400 a month in net rental income. It was a great investment until 2020, when COVID hit. Now it's an underperformer since it's a condo and not a single-family house.

However, by owning the condo, I no longer fear housing affordability. Instead, the condo has created housing security by generating steady rental income.

What If Housing Gets Even More Unaffordable?

There's one last variable about housing affordability I'd like everyone to consider. What if housing gets even more unaffordable? Many think with housing affordability so low, home prices must come down if mortgages rates don't. But what if home prices continue to go up?

All one has to do is look at housing affordability in Canada. Canadian home prices are way higher adjusted for income compared to U.S. home prices. If the U.S. housing market turns into the Canadian housing market, expect U.S. home prices to rise by another 30% – 70%!

Canadian home prices and incomes versus U.S. home prices and income - Canadian housing affordability is even lower in the U.S.

Inflation and economic growth are two variables that are too powerful to overcome. Therefore, I suggest buying real estate as young as you possibly can to at least get neutral inflation and economic growth. In ten years, I'm pretty sure you'll likely be glad you bought today.

Reader Questions And Suggestions

What are your thoughts about housing affordability today? Is homeownership becoming a luxury instead of a right? How will the social dynamics play out between younger generations who can't afford homes and older generations who can? Do you think the Fed wants to create a nation of renters?

To invest in private real estate more strategically, check out Fundrise. Fundrise offers funds that primarily invest in residential and industrial properties in the Sunbelt, where valuations are lower and rental yields are higher. The spreading out of America is here to stay due to technology, work-from-home, and increased work flexibility overall.

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39 thoughts on “The Housing Affordability Problem Is Creating A Nation Of Renters”

  1. Hi Sam,

    What is your strategy for negotiating a purchase price on a house? For example, do you look at the original listing price or the current listing price? Also, at what rate do you settle the price at and how many times do you suggest negotiating back and fourth with the seller? Lastly, do you ask them to cover any additional expenses once the price is agreed to.

      1. Sam, should I focus on the original list price or the current price? Would you settle for 5% below current price and 15% below current list price? Trying to determine what is best. Appreciate any guidance on this.

  2. Your article is timely, as I have been worried for years about how people are buying multiple houses as a way to build wealth. Meanwhile, that takes those houses out of the equation for people who are looking to buy a house.

    Anecdote: I live in detached house in a nice suburb of Washington, DC. The neighborhood has great schools and is conveniently located to a lot of jobs (or WFH of course). Next door, there is a house that the owners have rented out for at least 20 years. The owners are in the 70’s, and have multiple rental homes.

    Over the years, so many people have asked me if I would ask the owners (of the house next door) if they would be willing to sell. (These were would-be first-time home buyers.) So I once asked the owner if she’d be willing to consider selling the house. She laughed at my question and said it would be absurd to sell because “we are making so much money off of this rent, and it gives us something to do in retirement.”

    It made me pretty sad at the time. The house is just not available for someone to buy and get on the property ladder, because a person insists on owning it and renting it out. The tax code should probably address this, or otherwise the wealth gap will widen.

    1. This is the growing trend. In addition to building a stock portfolio for retirement, more people are building rental property portfolios for retirement.

      If someone can’t buy one house in a neighborhood, there are ALWAYS other houses to buy. But you’ve got to work your way up to the choicest location.

      1. Thank you so much for your reply. I guess my question is more about the morality/ethics of people building rental property portfolios of single-family homes, as an investment for retirement. It’s one thing for an investor to buy stock or commercial real estate. But when investors are buying houses, then that is having an impact on the ability of the next generation of young people to buy a house.

        (I am personally not in this situation, and we plan to help our kids with down payments, etc. I am just someone who worries about the next generation, and how kids will do if they are on the wrong side of the wealth gap, or don’t have super-organized and savvy parents.)

  3. Owned rentals for 35+ years & it has been an exponentially profitable ride.
    Demand over the last couple of years has been so strong we can raise rents 50% after every vacancy.
    Furthermore, the recent onslaught of higher property taxes on some of our investment properties have forced us to raise rents 40% annually just to break even on those tax increases.
    We had a $425/month, 200sqft apt became vacant. We cleaned, painted & threw it on Craigslist for $550/month. Had a few view it, but all failed screening then a guvt organization called us & offered us $950/month if they could ‘place those in need of housing’. We accepted & a year later they are grabbing more of our apartments as they become vacant, putting them out of reach of the usual rental population.
    Obviously our taxes at work.
    We know so many that can barely afford the ever increasing rents & have no hope of ever owning a home.

  4. “If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around them will deprive the people of all property until their children wake up homeless.” – Thomas Jefferson

  5. Tough Market

    Some interesting info from Bank of America who liken’s today’s housing market to that of the 1980s.

    Household mortgage debt represented roughly 65% of U.S. consumers’ disposable income in the second quarter, compared to 100% before the GFC. And the ratio of Americans’ mortgage debt to their real estate assets—also called loan-to-value—was just 27% in the second quarter, compared to over 40% in 2008 and roughly 50% in 2010, Bank of America’s data shows.

    According to Bank of America, today’s housing market looks a lot more like the early 1980s than it does 2008. Back then, just like today, home prices had boomed for years before Fed officials were ultimately forced to hike interest rates aggressively in an attempt to fight inflation.

    The rise in the consumer price index peaked at around 14% in 1980 before then–Fed Chair Paul Volcker’s hawkish policies sent mortgage rates to 18% in a year’s time, cooling inflation, but sparking a recession. This caused a serious downturn in the housing market in which home sales and building levels cratered. However, national home prices actually remained stable.

    At the start of Volcker’s term as Fed chair in August 1979, the median U.S. home sales price was $64,700. And even after a near doubling of mortgage rates, that figure rose to $69,400 by the second quarter of 1981.

  6. How will the social dynamics play out between younger generations who can’t afford homes and older generations who can?

    Macro level- History channel had a good write up. Progressive era followed the gilded age, essentially what is being seen in younger generations now. Of course there was world war, perhaps what is happening in Ukraine. Bottom line, no resolution for a good decade.

    Micro level Regarding housing, I don’t see high prices, especially in the sunbelt. Having two children of the same sex means you are fine with a 2 bedroom condo/townhouse. Those are easily in reach of the middle class. Here’s North Carolina, for example

    1. WhoBelugaToo

      That posting hits close to home, and signals a death of the American Dream, especially in small sunbelt towns like ILM.

      The middle class kids growing up there are being priced out by “Carpet Bagging Yankees” (not completely true, they aren’t all from the North East).

      The infrastructure is insufficient already, and the town is owned by realtors and property developers.

  7. CaptainObvious

    14% of people own multiple properties, but there is a housing shortage? It’s clear we need to fairly tax second homes / rental properties instead of encourage people to use them as tax shelters and way to cash flow off their wealth without providing much utility to society.

    1. What would you consider a fair tax to be? As the population of multiple property owners grow, politicians will try to pander to this group even more.

      As this article argues, the Fed is already doing so by making more people renters for longer.

      1. CaptainObvious

        Nix depreciation unless you are running an actual real estate business, say… own more than 3 properties. Getting rid of partial rental utilization tax breaks for second homes altogether. There is a lot to work with. Taxing investors and who leave homes vacant just to catch supply squeezes or safe harbor foreign cash might also be helpful. That could help incentivize developers to price units to market instead of just limited supply to inflate regional markets.

    2. Lee Anthony Mroszak

      All second homes and “investment properties” must be expropriated and distributed to working people in need of housing. It’ll take a mass movement to get it done, but thankfully the ruling class is creating the conditions for exactly that to emerge!

  8. Homeownership is definitely happening later in a lot of places. Even though the median first time buyer age is something like age 34, I know many couples who are still renting in their late 30s and are just starting to get their first home in their early 40s.

    1. That would be me*. I moved to my present city during a ridiculous run up in prices and I knew a crash would come. Although I had to wait almost ten years for it, it did happen and even accounting for rent over that decade, I came out ahead. So much for claims that “you’ll be priced out forever!” Since then, my house has more than doubled in value, so I need to sell it before the next crash…

      * Late 40’s rather than early.

      1. What year and city did you buy?

        The “problem” some people have renting is that the rental stock quality isn’t as good as the ownership stock. But case by case basis.

  9. There has been much talk about how homeowners will feel stuck in their current homes due to the amazing mortgage rates they have locked in. I don’t quite buy that, because people always have reasons to move, but I do think we will see a lot of people renting their house out and hiring a property management company to do all the work, because they don’t have any actual interest in being a landlord. What do you think? I am not a homeowner and don’t plan on being one for at least 4 years due to impending relocation for my wife’s career, and worried my only options will be overpriced new constructions or renting from property management companies who are absolutely dreadful to work with.

  10. The younger generation doesn’t want to own – or they’ve been influenced to think that way. I don’t think they’ll care how lopsided homeownership is.

    1. Buddhist Slacker

      This is absolutely not true that the younger generation doesn’t want to own. Some are doing whatever it takes. Some have given up because it would take them 32 years just to get a down payment and they still wouldn’t be able to afford the monthly payments. They are very well aware of the dynamics and are extremely resentful of this. Maybe you should go on TikTok and check out the videos about how the boomers ruined everything lol. Of course some are financial disasters, as seen on Caleb Hammers YouTube channel, but some are employing all the techniques that Sam advises, such as living at home to save for a down payment if available, getting bridge loans from their parents if available, etc.

      Sam thank you so much for all this fantastic data and information. I really appreciate it, it’s so helpful. I was on the fence about getting another property in the Midwest but I’m going to crunch some more numbers.

  11. Love the read, but I have the exact opposite opinion of what is happening:

    Home values will continue to rise dramatically, but rent prices will not see the same level of increase in tandem.

    The two have and will become decoupled.

    Real estate in the US is a bargain compared to the rest of world (ie Canada etc). You have said as much yourself. Nobody dreams about cashflowing in Canada or Hong Kong etc. It’s only here in the US do we have this BiggerPockets like notion that rental properties “should cash flow”.

    The reality is that if you purchased in 2021 or before, you will be able to cashflow by renting out. 2022 or after? You won’t be able to cashflow for several years of ownership or more. But you will make money on paper through the appreciation of a real asset.

    This will become a game for sophisticated RE investors who don’t need a positive return on rents for long periods of time, but can take advantage of the appreciation and depreciation of the assets. Not for your average or newbie BiggerPockets bro.

  12. According to the final chart, from the Federal Home Loan Mortgage Corp, housing affordability was at historic highs from about 2009 to 2020, and housing affordability is better today than in the early 1980s. I’m not sure if I believe that houses were exceptionally affordable from 2009 to 2020, considering what I’ve seen with increases in house prices, and considering my experience of buying a house during that time. But maybe I’m not giving enough credit to the effect of low mortgage rates during that period. Anyway, if that chart is right, then the current affordability number isn’t really so terrible if we look at several decades of history rather than just the past ten years.

    1. I like the silver lining Outlook. It’s kind of like falling out at work oil prices at $100 a barrel, that’s not so bad since that’s where it was over 10 years ago when real Incomes were lower.

      Hopefully wage growth and other investment growth is enough to sustain home prices.

    2. As a 32 year old first time home buyer back 2009, I can attest that home prices were cheaper back them. I bought my 2,000 sq ft house in rural metro Atlanta for $126,500 back then. Now it is valued at $350,000.

  13. Honestly, I feel thankful about the higher risk free income and more renters. We rely on renters to pay down our mortgages and help fund our retirement.

    So I’m grateful to the Fed for its policies. Of course, I’d like for stocks and real estate to go up as well. But I’ll take higher rents while we wait.

  14. Housing is less affordable than ever. Homeownership is a luxury. I suspect there will continue to be more multigenerational living situations. I think demographics are responsible for creating a nation of renters as much as the Fed, and I don’t think it’s bad. Higher-density multifamily housing combined with preserving open space is a better way to accommodate population growth, in my opinion, than building more single-family homes.

  15. Given there is nonState, County, and City in the Republic that does charge property tax … or they take your property … we already are a nation of renters!

    Appreciate your blog, one of the best, but not voting for the uni-party matters!

  16. Great article. Given the citations, regarding % of homeowners with no mortgage, it may play out that the “saving grace” for much of Gen Z will come through inheritance. For those with less fortunate parents, there may be a widening of the wealth gap.

    One way to increase affordability is to accept higher density construction, similar to what has transpired in places like Denmark and Japan. Many cities are reconsidering zoning requirements (e.g min # of parking spaces per unit) along these lines. With increased ability to work remotely a diaspora from coastal / superstar cities – to more affordable areas of the country – may offer another means for individuals to secure homeownership, if it is important to them.

  17. I understand real estate lags the Fed and stock market, but home prices don’t seem to be going down in proportion to the rise in rates. For example, my neighbor’s house is on the market. Listed for $628k, a 30-year mortgage would be $4,000/mo. at today’s rates. Assuming this is a marketable monthly payment, that property could ratchet up to $900k if the Fed pivots in reaction to a recession. Totally insane.

    With the government’s tendency to sacrifice the long term for the short, there was talk about a 40-year mortgage to help affordability. Imagine what that would do to home prices.

    1. Housing prices should go down over the next 12 months or so, but GS and Zillow, have all the questions going up 4-6% over 12 months. If that happens, housing, affordability, it will get even worse, and millions of people will be priced out of the market forever.

  18. Hey FS,

    I never leave comments but one particular thing has become my personal soapbox.

    The FRED chart that everyone points to that says “66% of Americans own homes” is NOT what that chart actually says.

    “the home ownership rate is created through the Housing Vacancy Survey by the U.S. Census Bureau. It is created by dividing the owner occupied units by the total number of occupied units.”

    What it actually says: 66% of the Homes in America are owned by the person who lives in them.

    If I build more Apartment Complexes, the US Home Ownership Rate chart just went down.

    If one Boomer dies and 1 Millennial buys a house and splits it with 4 roommates, not of whom can afford it alone, the US Home Ownership rate stays the same.

      1. I have no idea – I was hoping you would have some ideas about how to find that data!

        Everywhere I can find online that discusses it ultimately leads back to the FRED chart.

        A very, very, rough estimate would be something like that “Total number of single family homes in American / Total Population”.

        But finding the data and making the correct exceptions would be an entire academic paper worth of work – which I am sure someone has done, but I haven’t found it.

        I just feel the 66% number paints a much more rosy picture of American home ownership than is accurate.

        1. Got it. Feel free to keep on investigating and find out since you believe to the data to be false. Never rest until you can find the answer.

          I do believe there is a growing percentage of people who are owning more than one home as a way to boost wealth and pay for retirement.

          Owning just one home is very pre-2000 planning as real estate as an asset class has evolved.

          Are you a homeowner or a renter?

      2. Thanks to HOMEANON for making us aware of this subtlety! We can do some back of the envelope calculations for fun. The Housing Vacancy Survey says there are 130M occupied homes in the U.S. in Q2 2023. There are roughly 261M adults of age 18 or older in the U.S., according to the Annie E. Casey Foundation. We have the given statistic that 66% of homes in the U.S. are occupied by their owners, so that would be 130M * 0.66 = 86M homes are occupied by their owners. On one extreme, if every one of those homes were occupied by a couple (co-owners), then the home ownership rate would be (86M * 2) / 261M = 66%. On the other extreme, if every one of those homes were occupied by just a single person (no co-ownership), then the home ownership rate would be 86M / 261M = 33%. So that would bound the results in a big range of 33% to 66% of U.S. adults are homeowners. If we then trust an article by the Pew Research Center that there are 35M homes owned by unmarried Americans, this would suggest that the homeownership rate might be closer to (35M*1 + (86M-35M)*2) / 261M = 52%. There’s lots of room for error there (and I might have erred too), but if we’re looking for actual percentages of people, I feel like this approach might be more meaningful.

        1. Great first attempt Mark!

          One thing that sticks out at me from the Census data: The language of their survey just says “occupied units”.

          To me that is ambiguous as to whether they are only referring to owned homes, of it means ALL real estate housing units – i.e. every apartment would be counted as a unit.

          That would change the 66% number a lot, and the final answer.

          I did find the page on their methodologies here, but haven’t dug into it enough to find the answer yet

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