Housing Production by Homeownership Rates

For the second quarter of the 2023, the HBGI included a segmentation of the housing market based on homeownership rates within counties. Using Census Bureau estimates of county-level homeownership rate, counties segmented into quintiles:

  1. The first quintile was any county with a homeownership rate greater than 79.22%
  2. The second quintile was greater than 75.56% but less than or equal to 79.22%.
  3. The third quintile ranged from a rate greater than 71.79% to less than or equal to 75.56%.
  4. The fourth quintile was grouped as having a homeownership rate greater than 66.53% but less than or equal to the 40th percentile of 71.79%.
  5. The final group had homeownership rates less than or equal to 66.53%.

Before looking at permit data based on these quintiles, it should be noted that approximately 177 million people live in counties in the lowest quintile. As previous NAHB analysis has shown, population density helps to explain a substantial amount of the variation in homeownership rates across counties in the U.S. The 100 smallest counties by population have an average homeownership rate of 72.72%, while the 100 largest counties by population have an average homeownership rate of 59.96%.

Key Findings:

The lowest homeownership rate areas have the largest market share of single-family home building, but it has been declining since the onset of the pandemic.

  • Pre-pandemic market share for these counties was 44.19%, following the first quarter of 2020. The average market share over the following 13 quarters was 41.5%.
  • In the second quarter of 2023, the market share was 39.6%.

Between Q4 of 2017 and Q3 of 2023, the largest increase in market share was for the third quintile, which rose 2.52 percentage points to 16.7%

  • Market share for the second quintile was 14.6%, first quintile 11.0%, and fourth quintile 18.0%
  • The fourth quintile was the only other one to lose market share

With over half of the population living in relatively lower homeownership areas, single-family home building is correspondingly concentrated in places with a larger number of households.

  • Counties with the highest homeownership rates make up the smallest share of single-family construction.

For more details, view this Eye On Housing article.