The housing market in the United States has been on fire during the past year and a half. Home prices rose by 20% year over year in March, according to the S&P CoreLogic Case-Shiller Index. In some cities, that figure was closer to 30%.
One reason for the surge in home buying is interest rates that dropped to under 3% for a 30-year fixed-rate mortgage. Those days are over, though, as mortgage rates are well above 5% today.
Americans also could move where they wanted to live because millions were able to work from home. Some companies say this will be permanent.
This trend may have helped some people buy houses, but many Americans still do not own their own homes. Nationwide, the homeownership rate stands at 64.4%, according to the latest American Community Survey (ACS) data from the U.S. Census Bureau. This rate varies substantially across the country, however. In some U.S. cities, homeownership is far less common than it is nationwide.
Using census data, 24/7 Wall St. identified the cities with the lowest homeownership rate. Cities, defined as places with populations of at least 25,000, are ranked by the share of housing units occupied by their owners.
Among the cities we considered, homeownership rates ranged from 12.5% to 34.0%. The largest share of these cities are in the Northeast, including 12 in New Jersey alone.
Homeownership can be expensive. In most of the cities on our list, the typical home is worth more than the national median home value of $229,800, making homeownership less affordable for larger shares of the population.
Many of the cities with low homeownership are places with major colleges or universities. Because a significant share of the population in college towns reside there temporarily, the transient population is more likely to rent a home than buy one. These places include New Haven, Connecticut, home to Yale University; Troy, New York, home to Rensselaer Polytechnic Institute; and Blacksburg, Virginia, home to Virginia Tech.
The city with the lowest home ownership rate is University (Hillsborough County), Florida. Here are the details:
- Homeownership rate: 12.5%
- Median home value: $91,900 (tied for 63rd lowest of 1,789 cities)
- Median monthly housing costs (with mortgage): $1,123 (tied for 164th lowest)
- Median monthly housing costs (no mortgage): $339 (tied for 24th lowest)
- Median household income: $29,380 (sixth lowest)
Methodology: To determine the city with the lowest homeownership rates, 24/7 Wall St. reviewed five-year estimates of the share of housing units that are occupied by their owners from the ACS.
We used census “place” geographies, a category that includes incorporated legal entities and census-designated statistical entities. We defined cities based on a population threshold: census places needed to have a population of at least 25,000 to be considered.
Cities were excluded if homeownership rates were not available in the 2020 ACS, if there were fewer than 1,000 housing units, or if the sampling error associated with a city’s data was deemed too high.
The sampling error was defined as too high if the coefficient of variation (a statistical assessment of how reliable an estimate is) for a city’s homeownership rate was above 15% and greater than two standard deviations above the mean coefficient of variation for all cities’ homeownership rates. We similarly excluded cities that had a sampling error too high for their population, using the same definition.
Cities were ranked based on the percentage of housing units that are occupied by their owners. To break ties, we used the number of housing units that are occupied by their owners.
Additional information on median home value, median housing costs with and without a mortgage, and median household income are also five-year estimates from the 2020 ACS.
Click here to see all the cities where the fewest people own homes.
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