Homeownership Rate Expected To Drop Even Further in 2026

Earlier this year, the homeownership rate in the U.S. hit a six-year low, and according to new research from real estate marketing platform Realtor.com, that rate is expected to fall even further in 2026. In Q-2 2025, the homeownership rate hit 65%, and next year, that figure is projected to fall to 64.8%.

In data going back to 1965, the homeownership rate reached an all-time high in 2004 at 69.2%, but in 2016 it dropped to an all-time low of 62.9%.

The most recent drop in the homeownership rate is likely due to ongoing affordability challenges in the housing market. Down payments are expected to remain high in 2026. Since the homeownership rate is defined by owner-occupied households, a recent surge in investor activity—accounting for more than 10% of recent homebuyers—is also lowering the homeownership rate.

Next year, affordability is expected to improve modestly as mortgage rates ease toward 6.3% and incomes rise faster than home prices, according to the new Realtor.com national forecast.

That slight improvement could coax some prospective homebuyers off the fence, but the forecast expects that effect to be outweighed by softer rent prices, making renting relatively more affordable, particularly for Gen Z members hitting adulthood.

"Already, homeownership rates for younger households have declined more than the homeownership rate overall, and once this trend is underway, it's hard to stop," says Hale.

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

A recent Realtor.com survey of Gen Z adults who currently own or hope to own a home found that 82% of respondents believe it’s harder for their generation to buy a home compared with previous ones. As well, 16% say housing affordability is among their highest concerns, and only 36% feel financially ready to buy a home.