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The U.S. homeownership rate has declined to 65.1% in the first quarter of 2025, its lowest level since before the COVID-19 pandemic, according to the latest U.S. Census Bureau report. This represents a slight decrease from 65.6% a year earlier. Affordability challenges and low inventory are primary drivers, with younger buyers under 35 experiencing the most significant drop. While homeowner vacancy rates have increased, they remain below pre-pandemic norms, indicating the market is still tight. The spring selling season is expected to see strong demand in more affordable regions like the Midwest.
The gradual decline in homeownership is largely attributed to persistent affordability issues. The median list price for vacant homes was $300,600 at the start of 2025, a figure that continues to fall but remains a barrier for many. "Though recent inventory gains have kept vacancy at a recent high, there are still far fewer vacant homes than was typical in the years pre-pandemic, suggesting that inventory still has some ground to cover," says Hannah Jones, a senior economic research analyst. This means that even with slight improvements, the supply of homes is not yet meeting demand, keeping prices elevated for potential buyers.
Homeownership rates have fallen across nearly all age groups year-over-year, with the sharpest declines among younger Americans. This data underscores a broader trend of delayed homeownership.
| Age Group | Homeownership Rate (Q1 2025) | Year-over-Year Change |
|---|---|---|
| Under 35 | 36.6% | -1.1 percentage points |
| 35 to 44 | 60.3% | -1.1 percentage points |
| 45 to 54 | 70.6% | -0.2 percentage points |
| 55 to 64 | 75.2% | -1.1 percentage points |
| 65 and older | 79.0% | +0.3 percentage points |
The significant jump between the under-35 and 35-44 age brackets supports recent data showing the typical age of a first-time homebuyer is now 38. Homeownership among those under 35 has fallen to its lowest level since before the pandemic.
The market dynamics vary significantly by region. The homeowner vacancy rate—the percentage of homeowner inventory that is vacant for sale—is highest in the South (1.3%), followed by the West (1.1%), Midwest (0.9%), and Northeast (0.6%). "Only the Northeast saw a falling vacancy rate year over year," Jones notes. For renters, the news is more favorable. The national rental vacancy rate is 7.1%, providing more options and potentially easing price pressure. The South leads in rental vacancies at 8.6%, a result of a pandemic-era construction boom that is still adding inventory to the market.
For current buyers, the market presents a mixed picture. Affordability is the key factor shaping demand. "The South and the Midwest have performed well in terms of affordability. The Northeast has performed the worst in terms of both new construction activity and affordability," Jones adds. This is directing buyer activity toward metros that offer better value. Based on our experience assessment, buyers are increasingly seeking "more bang for their buck," focusing on affordable areas in the Midwest or reasonably priced markets in the Northeast.
The takeaway for buyers is to research regional inventory and price trends thoroughly. While challenges persist, opportunities exist in markets with higher vacancy rates and stronger construction pipelines. For sellers, understanding local competition is critical. Older buyers are finding more success in the current market, but overall, affordability remains the central concern for most Americans navigating the 2025 housing landscape.
