In this episode of the REconomy Podcast™, Chief Economist Mark Fleming and Deputy Chief Economist Odeta Kushi mark National Homeownership Month by examining whether America's enduring appetite for homeownership can overcome the most affordability-challenged era in decades. Their conversation explains what the long-run increase in the share of 25-to-34 year olds living with their parents means for homeownership demand, why the housing market is short more than four million sales since the pandemic, and why the demographic case for future housing demand remains firmly intact.
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"Add up the gap, and the market is short more than 4 million home sales relative to pre-pandemic trends. That's a significant amount of pent-up demand waiting for conditions to improve." — Mark Fleming, Chief Economist, First American
Odeta Kushi - Hello and welcome to episode 143 of The REconomy Podcast, where we discuss economic issues that impact real estate, housing and affordability. I'm Odeta Kushi, deputy chief economist at First American, and here with me is Mark Fleming, chief economist at First American. Hey Mark, you know what month it is?
Mark Fleming - Of course. Any decent real estate economist knows it's officially Homeownership Month.
Odeta Kushi - That's right. Or as we housing economists like to call it, our month.
Mark Fleming - Yes, our Super Bowl, shall we say.
Odeta Kushi - Exactly, except instead of touchdowns and Gatorade showers, it's mortgage rates and housing starts.
Mark Fleming - And instead of halftime shows, we get Census Bureau releases. Look how excited I am.
Odeta Kushi - Which honestly is my version of entertainment. You know, June is one of my favorite months to record this podcast because it gives us an opportunity to step back from the day-to-day noise of mortgage rates and inventory data and remember why housing matters so much in the first place.
Mark Fleming - That's right. Homeownership is about more than just square footage or interest rates. It's about stability, community, wealth creation and for many people, achieving a version of the American Dream.
Odeta Kushi - Although maybe a slightly more expensive version of the American Dream these days?
Mark Fleming - Yeah, slightly.
Odeta Kushi - Okay, well, affordability is about 60% below pre-pandemic norms, so maybe a lot more expensive. But despite the affordability challenges, demand for homeownership is still very much alive. According to a 2025 survey, 85% of the more than 3,000 U.S. adults surveyed by Coldwell Banker said that owning a home is still a key component of the American Dream. And that's what we wanted to focus on today: that enduring appeal of homeownership, how Homeownership Month even came to be, where the homeownership rate stands today, and why we think there's still so much pent-up demand waiting on the sidelines.
Mark Fleming - And maybe, just maybe, whether that pent-up demand is finally starting to unfurl.
Odeta Kushi - Hmm. Well, before we dive into the economics, let's start with a little history lesson, which we love to do on this podcast. Efforts to promote homeownership in the U.S. date back to the early 20th century, gaining momentum in the 1920s through national campaigns that emphasized the importance of homeownership to communities and to economic prosperity.
Mark Fleming - The modern federal observance came later. President Bill Clinton established National Homeownership Week in 1995 and President George W. Bush expanded it to National Homeownership Month in 2002. Support for promoting homeownership has long been bipartisan because housing has traditionally been viewed as a cornerstone of economic opportunity and household stability.
Odeta Kushi - Week to month, I like it. And it's one of those topics that consistently crosses generations and political lines, whether it's your grandparents talking about buying their first home after World War II, Gen Xers navigating the housing boom and bust of the 2000s, or millennials scrolling listings at midnight, while wondering if avocado toast really caused all of these issues.
Mark Fleming - Yes, the famous avocado toast theory of housing economics. Not common sense, I suspect.
Odeta Kushi - Which, to be clear, did not survive peer review. Though I am one of those millennials who likes to scroll listings at midnight. Guilty.
Mark Fleming - I think you don't have to be a millennial to enjoy that.
Odeta Kushi - That's right. It's a bit of a guilty pleasure.
Mark Fleming - Exactly. But the reason policymakers have historically supported homeownership is because it creates both private and public benefits. At the household level, it allows families to build wealth over time through home equity accumulation. At the community level, homeowners tend to stay in place longer, invest in their neighborhoods and contribute to local economic stability.
Odeta Kushi - And the wealth-building aspect is especially important. We've written about this many times and spoken about it on this podcast before. You can find some of the data in our analysis called Building Wealth Brick by Brick on our Econ Center. One of the key points is that homeownership acts as a forced savings mechanism. Every monthly mortgage payment gradually builds equity.
Mark Fleming - Yeah, but rent payments build equity too. Just not your own.
Odeta Kushi - Exactly. Well, that's an important caveat. And over time, that accumulated equity can become a major financial asset. It could help fund retirement, education, even small business creation, or provide a financial cushion during economic downturns.
Mark Fleming - And historically, home equity represents the largest source of wealth for most households. It's one of the reasons the wealth gap between homeowners and renters is so substantial. According to the 2022 Survey of Consumer Finances, a triennial (that's a tough word) survey that collects detailed accounts of household finances, the median homeowner has 38 times the household wealth of a renter.
Odeta Kushi - That's a tough one. I'm really excited for that survey to come back. I think that means we're getting a 2025 edition soon. Any day now. Though I suspect this story remains largely the same as it has for some time. And, while we often focus on the financial benefits, there are important non-financial benefits of homeownership too. It can provide a greater sense of stability, control over your living environment and stronger ties to a community.
Mark Fleming - Yes, any day now, I imagine. There's also a psychological component. People often feel a stronger sense of pride and security when they own their own home. It becomes more than just a
place to sleep. It becomes part of their identity and long-term plans.
Odeta Kushi - Although, with homeownership also comes the realization that apparently you now spend weekends discussing mulch and water heaters.
Mark Fleming - That's the homeowning life for you, I suppose.
Odeta Kushi - Honestly, I think I knew I was officially a homeowner when I became very emotionally invested in the health of my lawn. And I am a weekend regular at a DC gardening store called American Plant.
Mark Fleming -Ha! You know, I'm learning so much about you on this episode, Odeta. Lawns can become a little bit of an obsession. I do agree.
Odeta Kushi - Yeah, one I know all too well.
Mark Fleming - But we should acknowledge that homeownership is not easy right now. Affordability conditions remain challenging. Mortgage rates are still elevated compared with the ultra-low rate environment many buyers became accustomed to during the pandemic years. And home prices remain historically high.
Odeta Kushi - And, in fact, according to our latest First American Data and Analytics House Price Index, house prices in April came just a touch below the record high in May of 2025. So we could — wait, why do I keep saying 2025 so weird?
Mark Fleming - That's kind of weird.
Odeta Kushi - Okay, three, two, one. In fact, according to our latest First American Data and Analytics House Price Index, house prices in April came in just a touch below the record high in May of 2025. So, we can celebrate the benefits of homeownership, while also recognizing the barriers many aspiring buyers face, particularly first-time home buyers. Affordability is stretched because buyers are facing the combination of higher borrowing costs and still limited inventory, particularly in some Northeast and Midwest markets.
Mark Fleming - That's right, which brings us to the homeownership rate itself. Despite these challenges, the U.S. homeownership rate has remained relatively resilient. Today it's hovering around the mid-60% range, which is consistent with historical long-run averages.
Odeta Kushi - And that's pretty important because sometimes people assume younger generations have permanently abandoned the goal of homeownership. But actually, the first-time home buyer share among agency loans (that's GSE loans, FHA, VA) has been largely steady around 60%.
Mark Fleming - Yes, evidence that the desire hasn't disappeared, but the timing may has just shifted.
Odeta Kushi - That's a very good point. Millennials have delayed homeownership compared with previous generations, in part because they've delayed key lifestyle decisions that are highly correlated with becoming a homeowner. They've also stayed in school longer. They're the most educated generation. So, this is delayed, not denied, homeownership demand. They've also faced a pretty tight inventory environment.
Mark Fleming - And now Generation Z is just entering the housing market under difficult affordability conditions.
Odeta Kushi - But here's where the story becomes interesting. Even though affordability has delayed household formation and home purchases, it hasn't eliminated demand. In many ways, it's created pent-up demand.
Mark Fleming - Right. And one of the clearest indicators of pent-up housing demand is the elevated share of young adults living at home with their parents. Care to indulge us with some stats?
Odeta Kushi - I will, I will indeed. We just completed this analysis and we will be publishing a blog all about it. But according to our analysis of CPS IPUMS ASEC microdata (that was a lot of acronyms, you can look it up) from 1990 through 2025, the share of 25-to-34 year olds living with parents rose significantly over the last decade and surged during and after the pandemic. Historically, the average share since the 1990s has been about 13%. Today it's around 16%, but it peaked at 18% in 2020.
Mark Fleming - So at 16% right now, that's substantially above the long-run norm.
Odeta Kushi - Substantially above the long-run norm. And what's especially important is that about every percentage point decline in the share of 25-to-34 year olds living with parents implies over 450,000 additional young adults forming independent households, whether as renters or as homeowners.
Mark Fleming - So three percentage points times 450,000 — we're talking about well over a million.
That's a very large amount of potential housing demand waiting in the wings.
Odeta Kushi -It kind of reminds me of those old Napster-era download queues from the early 2000s. There's this giant backlog waiting for conditions to improve to finally move forward.
Mark Fleming - Ha! That is definitely a millennial reference.
Odeta Kushi - I've been waiting to mention Napster for a long time, so thank you. Could you believe it?
Mark Fleming -I know. It's the first time in all of these episodes. But I will counter with an '80s reference, of course. The housing market right now is a little like a coiled cassette tape. There's all that demand wound up tightly, and eventually it's going to unwind.
Odeta Kushi - Hopefully not with the same level of chaos involved in untangling cassette tapes from a Walkman.
Mark Fleming - Yeah, the Walkman. Many times the size of your phone and it can only play one cassette. Younger listeners, you'll need to Google all of that or ChatGPT it, I guess. But you know what? The times, they are a-changin'.
Odeta Kushi - Yeah. Lots of metaphors there, spanning lots of generations. We're going from the 2000s to the '80s to the '60s. But the broader point is important. Many young adults are delaying major housing decisions in part because affordability constraints are forcing them to stay put longer. Yet again, demographic demand has not disappeared.
Mark Fleming - And demographics matter tremendously for housing. The largest age cohort for first-time home buying activity is typically people in their late 20s through their late 30s. The millennial generation remains the largest living generation, and Gen Z, while smaller, is following close behind.
Odeta Kushi - So, even though existing home sales activity has been subdued recently, the underlying demographic foundation for future housing demand remains strong.
Mark Fleming - Exactly. Housing demand isn't driven solely by where mortgage rates happen to be in
a given month. It's also driven by life events: getting married, having children, advancing in your career or simply wanting more independence and stability. And when people delay those decisions because affordability is stretched, that demand doesn't disappear. It builds. Think of it as a reservoir of pent-up demand. When affordability improves, whether through lower mortgage rates, rising incomes, or more housing supply, some of those sideline buyers can re-enter the market relatively quickly.
We can actually see evidence of that in existing home sales data. Before the pandemic, the five-year average of annual existing home sales was about 5.4 million. But from 2022 through 2025, sales activity has consistently run well below that historic norm. Add up the gap, and the market is short more than 4 million home sales relative to pre-pandemic trends. That's a significant amount of pent-up demand waiting for conditions to improve.
Odeta Kushi - Right. So, we shouldn't confuse today's constrained activity with permanently weak housing demand. I should also note that today's weak hiring environment is also holding back housing market turnover. So, if the labor market improves, that could allow the housing market to recover more robustly.
Mark Fleming - Good point. And it's also worth mentioning that one reason inventory has gradually improved is because some sellers are finally adapting to the higher rate environment. As inventory improves, affordability can slowly improve too.
Odeta Kushi - Right. It's unlikely we're going to return to the ultra-low 3% mortgage rates of 2021, but buyers and sellers don't necessarily need that to happen for the market to normalize.
Mark Fleming - Yes. Housing markets function on adjustment. Buyers adjust expectations, sellers
adjust expectations, builders respond to demand, and over time the market finds an equilibrium.
Odeta Kushi - Though sometimes very slowly. But, in today's market, we're seeing affordability and inventory gradually improve. Builders have stepped in to build smaller homes at more affordable price points, really catering to the demand environment. Remote work allows for some geographic flexibility. But of course, headwinds exist and a return to normal will take time.
Mark Fleming - Housing is many things, but fast is usually not one of them.
Odeta Kushi -Yeah, exactly. And another thing worth mentioning during Homeownership Month is that there's no single right timeline for becoming a homeowner. Delayed homeownership doesn't mean failed homeownership. So as we celebrate Homeownership Month, I think there's room for both realism and some cautious optimism. Realism about affordability challenges and supply shortages, but optimism because the desire for homeownership and the economic and social benefits it provides still remain very strong.
Mark Fleming - And importantly, the demographic drivers supporting future housing demand also remain intact.
Odeta Kushi - So maybe the takeaway is this: housing demand didn't disappear. It's temporarily moved back into mom and dad's house.
Mark Fleming - Economically accurate and increasingly common. But the aspiration to move back out and own a home is still very much alive.
Odeta Kushi - Staying alive. All right. I think we're going to end on that note. Happy Homeownership Month to all, and thank you for joining us on this episode of the REconomy Podcast. If you have an economics-related question you'd like us to feature in the future, you can email us at economics@firstam.com. And as always, if you can't wait for the next episode, you can subscribe to our Econ Center at firstam.com/economics or connect with us on LinkedIn. Until next time.
Thank you for listening, and we hope you enjoyed this episode of The REconomy Podcast from First American. We're pleased to offer you even more economic content at firstam.com/economics. This episode is copyright 2026 by First American Financial Corporation. All rights reserved.
This transcript has been edited for clarity.