Americans Under 35 Are Buying Homes Again But the Lockout for Many Continues

Key Takeaways

• Homeownership among people younger than 35 rose in the last quarter of 2025.
• The gain reverses a slide that had pushed young-adult ownership to its lowest point since 2019.
• Easing borrowing costs in late 2025 helped some sidelined buyers return to the market.

Homeownership among Americans under 35 recently hit its highest point in two years, a rebound after months of grim headlines about young buyers being priced out of the market.

Data from the Census Bureau’s Housing Vacancy Survey shows that 37.9% of households headed by someone under 35 owned their home in the fourth quarter of 2025. That’s up 1.6 percentage points from a year earlier, when the rate had sunk to 36.3%—the lowest level in five years. That number for 2025 was a surprise to analysts who expected homeownership rates to continue dropping.

Easing mortgage rates have been “the most immediate catalyst, pulling some previously sidelined buyers back into the market by improving monthly affordability,” said Hannah Jones, senior economic research analyst at Realtor.com, in an email. Modest price adjustments, rising inventory, and increased geographic flexibility toward lower-cost markets also played a role, she said.

What Changed

The rebound could mark a turning point. As recently as mid-2024, the under-35 rate had been sliding steadily, weighed down by mortgage rates that topped 7% and home prices that showed little sign of cooling.

The low point came in the last quarter of 2024, when just 36.3% of young households owned their home, the worst reading since 2019. But as borrowing costs eased in late 2025, some buyers jumped back in.

Still, the biggest hurdles for a typical person under 35 haven’t disappeared.

“Saving for a down payment is difficult while home prices remain elevated, and many young buyers are trying to balance that goal with preparing for a monthly mortgage payment and other housing costs,” Jones said. “Doing all of this at once, often while paying relatively high rents, makes breaking into homeownership especially challenging.”

Why This Matters To You

Homeownership is the primary way most Americans build wealth over time, and young buyers who miss out early can face compounding disadvantages for decades. Even a small uptick in the under-35 rate signals shifting conditions in a market that had seemed locked shut for first-time buyers.

Still a Long Way From 2004

The rebound is real, but under-35 homeownership remains well below where it stood two decades ago.

During the mid-2000s housing bubble, the rate climbed as high as 43.6% in 2004, almost six percentage points higher than today. The 2008 Financial Crisis and the housing crash sent it tumbling, with a long, slow bottoming out coming at 34.1% in 2016. Since then, progress has been uneven: a slow climb through the late 2010s, a pandemic-era spike, then another slide as interest rates surged in 2022 and 2023 as the Federal Reserve fought inflation.

Jones said a rapid return to higher levels is unlikely. Young buyers are delaying home purchases, and entry-level homes remain in short supply.

Related Education

Net Worth of Americans Under 35 Explained: How Young Adults Are Financially Positioned

Mortgage Trends by Age Reveal if You’re Spending Too Much on Housing

Buyers Head for the Heartland

Young buyers shut out of coastal metros may be helping drive migration back to the Midwest, which posted positive net domestic migration for the first time this decade in 2025.

“Affordability is a strong draw for first-time buyers, and regions offering attainable prices are better positioned to capture that demand,” Jones said.

The Midwest was losing more than 175,000 residents a year to other states earlier this decade. Ohio alone flipped from losing more than 32,000 residents in 2021 to gaining nearly 12,000 in 2025. Michigan swung from a loss of 28,000 to a small gain.

The Midwest’s overall homeownership rate, 71.3% in the fourth quarter, leads the four U.S. regions. The West, where housing costs in Los Angeles, San Francisco, and Seattle keep ownership rates low, trails the national average at 60.8%.

Update, Feb. 5. 2025: This article was updated to include comments from Realtor.com’s research analyst.

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