Homeownership is influenced by a mix of individual choices, market dynamics, generational trends, and notably, the state you live in. Different states have different affordability levels, resulting in widely different homeownership rates across the United States. Additionally, median home prices across the US have been steadily increasing, adding another layer of complexity to homeownership accessibility. According to the US Census Bureau, between 2002 and 2023, the national homeownership rate was at its lowest in 2016 when it fell to 62.9%, but it has now risen to 65.7% in Q4 of 2023. However, some states far exceed the national rate, while others are far below it.
To understand how the homeownership rate has changed across the US in the past five years, Zoocasa analyzed median home price data and homeownership rates in 26 states and districts from 2018 to 2023. Some states were excluded from this report because sufficient median home price data could not be found.
Single-family median home prices were sourced from each state’s real estate board from December of each year unless specified. The national median home price for each year was sourced from the National Association of REALTORS®. Homeownership rates for each state were sourced from the US Census Bureau, Quarterly Residential Vacancies and Homeownership in Q4 of each year.
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Only 10 States and Districts Experienced a 5-Year Decline in the Homeownership Rate
From 2018 to 2023, just 10 out of 26 states and districts experienced a drop in the homeownership rate. Among those, Utah experienced the largest drop, going from a homeownership rate of 74.7% in Q4 2018 to 69.1% in Q4 2023. At the same time, Utah’s median home price increased by 58% from $299,900 in 2018 to $473,880 in 2023. The majority of states experienced a price increase of less than 52% from 2018 to 2023, putting Utah’s 5-year price increase at the higher end of the spectrum and possibly contributing to its homeownership rate decline.
Of the 10 states and districts that experienced a drop in the homeownership rate, four have homeownership rates below the national rate of 65.7%: Colorado, New Jersey, New York, and Washington DC. Washington DC not only has the lowest homeownership rate on our list, at 38.2%, but it also witnessed the smallest increase in median home prices at a mere 6% from 2018 to 2023. And with a median home price of $635,000, Washington DC is the second-most expensive area on our list to purchase a home, likely contributing to its low homeownership rate.
New York has the next lowest homeownership rate, at 51.2%, and experienced a 2.1% drop from 2018. The median home price in New York experienced modest growth from 2018 to 2023, rising by 39.7% to $380,000 in December 2023. New Jersey followed with a homeownership rate of 60.5%, a 5% drop from 2018. The Garden State also experienced the second-greatest increase in median home price from 2018 to 2023, with the median price rising by 68.9% to $515,000 in December 2023.
Despite Home Price Surges, Homeownership Rates Are Rising in Most of the US
On a national level, the homeownership rate increased by 1.4% from 2018 to 2023, while the median home price increased by 50% to $382,600. Of the states we analyzed, Michigan has the largest proportion of homeowners with a homeownership rate of 75.9%. This was a 1.5% increase from the state’s homeownership rate in 2018. Despite a 60.7% increase in home prices from 2018 to 2023, Michigan’s median home price remains on the more affordable end of the spectrum, standing at $281,186 in December 2023.
Massachusetts was the only state to experience an increase in the homeownership rate while still remaining below the national rate. The homeownership rate in Michigan increased by 2.8% to 62.8% in Q4 of 2023, but with a median home price of $575,000, homeownership is more of a challenge here than in other more affordable states. Pennsylvania has the lowest median home price on our list at $213,699 so it’s no surprise that its homeownership rate is far above the national rate at 71.3%.
Maryland and Tennessee were the only states to experience a more than 10% increase in the homeownership rate from 2018 to 2023. In 2018, both states had homeownership rates below 67%, and by Q4 2023 their homeownership rates climbed to above 72%. After Washington DC, Tennessee’s median home price increased by the smallest percentage, at just 21.3%, likely acting as an encouragement to potential homebuyers. Other states that experienced significant increases in their homeownership rates include Vermont, New Mexico, Minnesota, and Georgia.
If you’re looking to enter one of these markets, it’s important to speak with a local real estate agent who can give you specific information and guidance about the local real estate market. Give us a call today to discuss your home-buying plans.
