The home ownership rate in the United States is expected to fall further in 2026 after hitting a six-year low earlier this year, according to a new forecast from the Realtor.com® Economic Research Team.

According to U.S. Census Bureau data, the number of owner-occupied homes has rebounded over the past few years, hitting 65.0 percent in the second quarter of 2025, the lowest since 2019.

Realtor.com’s 2026 National Housing Forecast found that next year, the segment is expected to decline by an average of 64.8 percent annually.

“While we expect the decline in home sales to moderate slightly in 2026 for the first time since 2020, rents are also expected to decline,” says Realtor.com’s chief economist. Daniel Hale. “This means that potential first-time homebuyers trying to decide whether to buy or rent will find that renting offers near-term savings in most housing markets.”

Payoffs are expected to hit near recent highs in 2026, Hale says, presenting a significant hurdle for first-time buyers, a group with younger ages and less savings to tap.

Investors also remain active in the housing market, accounting for more than 10 percent of recent homebuyers, according to a Realtor.com analysis.

It is important to note that the homeownership rate is not the share of adults who own a home as measured by the Census, but rather the share of households that own homes.

This means that adults who live in a household owned by a family member or roommate don’t just show up in the calculation—they’re part of an “owner-occupied household.”

Still, census data offer insight into how the relative share of renters versus renters has changed over time, with demographic trends and housing costs playing a role.

With data going back to 1965, the homeownership rate hit an all-time high of 69.2 percent in 2004, as the average gen hit their mid-30s and most of the millennial generation still lived at home.

Homeownership then declined sharply as the millennial generation largely came of age in the midst of the global financial crisis and housing market collapse, delaying homeownership for many of that generation.

The homeownership rate hit a low of 62.9 percent in 2016, and then began to climb after millennials hit their 30s.

That rate rose sharply in 2020 as the Covid-19 pandemic both delayed household formation for Gen Z and fueled a brief frenzy of millennial homewares. Since then, the decline in home ownership has weighed down affordability on first-time homebuyers, pushing many out of the market.

This year, the median age of first-time homebuyers is at an all-time high of 40, while the average homebuyer is now 62, the highest on record, according to a recent report from the National Association of Realtors®.

Affordability remains a key struggle for first-time buyers, with home prices at record highs and rising mortgage rates increasing the cost of purchasing.

Next year, affordability is expected to push mortgage rates down to a 6.3 percent low and incomes will rise faster than home prices, according to a new Realtor.com national forecast.

This modest improvement may put some potential homebuyers off the fence, but forecasts expect the effect to be outweighed by softer rental prices, making rents relatively more affordable, particularly targeting younger members of Gen Z.

“Already, homeownership rates for younger households have declined more than overall homeownership rates, and once that trend gets going, it’s hard to stop,” Hale says.

Currently, members of Gen Z are ages 13 to 28, born from 1997 to 2012. This year, members of Gen Z accounted for just 3% of all home purchases, according to a NAR survey.

In a recent Realtor.com survey of Gen Z adults who currently own or hope to own a home, 82% of respondents believe it is harder for their generation to buy a home than previous kids.

At the same time, 16% say housing affordability is one of their biggest concerns, and only 36% feel financially prepared to buy a home.

“Fortunately, improving affordability in the housing market will lead to an increase in home sales in 2026, and while we will still see an overall slide in the homeownership rate, I expect this decline to moderate as younger households find their footing and begin to find ways to navigate these challenges.”