Millennial Wealth Diverges, Fed Research Reveals

New research from the Federal Reserve Bank of Minneapolis reveals a widening generational split in U.S. homeownership, challenging the notion of generational stasis. The study introduces a new metric, the homeowners-to-population ratio (HPOP), which counts individual adults rather than housing units. This HPOP measure indicates a national homeownership rate closer to 53%, significantly lower than the traditional owner-occupancy rate of 65%.

The disparity is particularly pronounced for adults under 35. While the traditional rate suggests 37% of this age group owned homes in 2024, the HPOP metric places the true figure at just 22%. Researcher Erik Hembre explained to Fortune that the traditional rate primarily reflects household heads, representing only about a third of all adults under 35. When every adult in this demographic is considered, the ownership rate drops to 22% for the entire under-35 cohort.

Furthermore, the research, conducted by Hembre, Benjamin Horowitz, and Maxine Xu, found that more than 1 in 10 U.S. adults live in owner-occupied homes without being owners themselves, a figure estimated at 13.9% nationally. This discrepancy arises because the traditional measure only verifies if the owner resides in the unit, neglecting other adult occupants like children, roommates, or parents who lack ownership stakes.

One particularly surprising finding highlighted by Hembre is that 9% of all U.S. adults aged 18 and older reside in owner-occupied homes as the child of the owner. This demographic is disproportionately affected by the traditional measure's blind spots, with the younger generation bearing the brunt of this undercounting of true ownership and wealth accumulation.