Fewer People Than You Think May Own Homes

It's a stat trotted out often in the world of real estate: The US homeownership rate is about 65%. But a new metric developed by a Federal Reserve economist suggests that number is too high, reports the Washington Post. Instead, it puts the figure at 53%—and significantly lower for young adults, notes Axios. The formula developed by Erik Hembre of the Federal Reserve Bank of Minneapolis is called the homeowners-to-population ratio, or HPOP. It counts US adults 18 and up and asks how many live in a home they personally own. The gap largely comes from adults living in someone else's owner-occupied home—most notably grown children living with parents, but also roommates, elderly parents living with adult kids, and other relatives.

The Post offers an example of how the traditional formula works: "If there are 10 homes on a street and seven of them are owner-occupied while three are rented, that's a 70 percent homeownership rate." Hembre's metric takes a more nuanced look at the individuals in those homes. By his measure, only 22% of those under age 35 are homeowners, down from 37% in the old formula, revealing "that younger people are having an even harder time buying a house than traditional data would suggest," says analyst Jaret Seiberg of TD Cowen, per Axios.