But this analysis does not consider the fact that many older adults, who purchased their homes years ago, are now retired and report lower incomes. 

When we look at 35-to-44-year-olds—a group that is established in their careers, often raising children, and considered to be in their critical homebuying years—we see a drop greater than 10 percent in the homeownership rate overall. This analysis does not consider the fact that household formation is lower than it was 45 years ago, likely underestimating the change that has occurred.

All but the highest income group show roughly an 8 percentage-point drop in the homeownership rate over time. And even the top 20 percent of earners (who earned more than $158,000 in 2023) have seen their homeownership rates drop by more than 5 percentage points.

Notably, the overall 10.8 percentage-point decline in the homeownership rate among 35-to-44-year-olds is greater than the decline in each of the individual quintiles. This means the relative income for this age group versus all homeowners nationally has fallen, with a larger share of homeowners who are 35 to 44 years old concentrated in lower income quintiles in 2023 than in 1980.

Though this group has lost ground overall, homeowners in the lower quintiles have lost more ground versus rest of the age cohort. In 1980, 35-to-44-year-olds in the bottom quintile were 54 percent as likely to own a home versus other 35-to-44-year-olds, while those in the top quintile were 124 percent as likely. By 2023, the bottom quintile was only 50 percent as likely to own a home as all 35-to-44-year-olds, and the top quintile rose to 136 percent. The difference has widened even more for 35-to-44-year-olds in the bottom quintile compared with all households, from 59 percent in 1980 to 47 percent in 2023. The difference is wide for the middle quintiles as well.

These changes in homeownership by income quintile for 35-to-44-year-olds are driven by several factors, but two are particularly important: marital status and educational attainment.

People who are married are much more likely to be homeowners than those who are single, and people in the lowest income groups are the least likely to be married.

Homeownership rates among the least wealthy have dropped, as fewer people with low incomes get married

Across all income buckets in 1980, the homeownership rate was 82.35 percent among married people and 44.5 percent among single people. The percentage of married people has dropped dramatically across all income groups, from 72.0 percent of 35-to-44-year-old households in 1980 to 56.1 percent in 2023.

At the same time, cohabitation has increased, partially offsetting the drop in the marriage rate. We can’t identify this in our data, but as a proxy, we can use the homeownership rate among household heads who are single and live in a household with more than one earner.

We find that the share of single households with one earner in the bottom quintile has risen from 52 percent in 1980 to 64 percent in 2023. By contrast, in the highest income category, this share has risen from 4 percent to 7 percent. Single households with one earner are the least likely to become homeowners compared with all other groups.

Education level also explains why lower-income households are disproportionately less likely to become homeowners

The homeownership rate is much higher among household heads with college degrees than those without, and the homeownership rate differential between these groups has increased. Interestingly, though education levels have risen across all income quintiles from 1980 to 2023, overall homeownership rates have declined. This seeming contradiction can be explained by the fact that homeownership rates have fallen among those with college degrees and those without, with the steepest occurring among those without degrees (a decrease of 19.9 percentage points).

Additionally, a college degree and the economic advantages that come with it might not translate to homeownership as readily as they did in 1980, given how housing costs have risen relative to incomes and changing economic conditions. The percentage of household heads who are college graduates has increased across all income percentiles, but those in lowest income quintile have seen the smallest gains.

Homeownership rates have fallen across the board for households in their critical homebuying years, and the gap in relative homeownership rates between lower- and higher-income household has widened. Today, lower-income households ages 35 to 44 are much less likely to become homeowners than previous generations.

How policymakers can help more Americans become homeowners

The growing disparities in homeownership rates among people at the lowest and highest income levels stems from multiple factors that reflect changes in economic opportunity. Given that homeownership has historically been one of the best ways to build wealth, policymakers should consider how the growing income gap affects households’ financial circumstances.

Though there is no simple solution to help all Americans achieve homeownership, a multifaceted approach can help prevent declining rates. On the supply side, reducing zoning restrictions and other regulatory barriers could increase housing production and could moderate price growth. On the demand side, policymakers could consider expanding down payment assistance programs and providing pathways to homeownership for lower-income households by expanding educational opportunities. These combined approaches could begin to address the widening homeownership gap that has emerged over the past four decades.