New Federal Reserve Metric Reveals True Extent of California’s Homeownership Crisis
A newly developed homeownership metric from the Federal Reserve indicates that California’s housing affordability crisis may be significantly more severe than traditional government figures suggest.
According to a report by the Los Angeles Daily News detailing data from the Federal Reserve Bank of Minneapolis, only 41% of California adults owned a home in 2025. This figure falls more than 10 percentage points below the national average of 53%, placing California second to last in adult homeownership nationwide, just behind Washington, D.C. at 35%.
The Federal Reserve’s findings contrast sharply with traditional data provided by the U.S. Census Bureau. For 2025, Census statistics reported California’s homeownership rate at 56%—15 percentage points higher than the Minneapolis Fed’s calculation. Even under traditional Census methodology, California ranked third lowest nationwide behind Washington, D.C. (41%) and New York (54%), against a national average of 65%.
The substantial disparity highlights how elevated living costs and record home prices prevent a major segment of California’s adult population from achieving homeownership.
Methodology Shift Accounts for Adult Children Living with Parents
The divergence between the two measurements stems directly from how individual housing status is categorized.
Under traditional Census Bureau methodology, if working adult children live in a home owned by their parents, the entire household is classified as an owner-occupied unit. Conversely, the Minneapolis Fed’s updated metric evaluates individuals rather than households. Adult children residing with their parents, renters subletting individual rooms, and adults residing in group quarters or senior facilities are all classified as non-homeowners.
Federal Reserve researchers explain that the updated framework provides a far more accurate representation of structural housing conditions. Regions with exceptionally high housing costs, such as California, naturally see larger proportions of adult children remaining in parental homes or sharing living quarters.
Data across states supports this structural link:
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High Parental Co-residence States: Across the 17 states with the highest rates of adult children living at home, the Minneapolis Fed homeownership rate averaged 53%.
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Low Parental Co-residence States: In the 17 states with the lowest co-residence rates, homeownership averaged 59%.
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High-Cost States vs. Low-Cost States: In the 17 most expensive housing markets nationwide, adult homeownership averaged 53%, compared to 58% in the 17 least expensive states.
Reductions Observed in Texas and Florida Markets
The revised methodology produced similar downward adjustments for other major populous states, including Texas and Florida.
Under traditional Census data, Texas recorded a 62% homeownership rate while Florida logged 68%. However, when evaluated under the Minneapolis Fed’s individual adult metric, homeownership rates dropped to 50% in Texas and 53% in Florida, demonstrating that high living costs and deferred independence impact major metropolitan centers across the country.
