The Minneapolis Fed’s new measure, called the homeowners-to-population ratio, or HPOP, counts individual adults rather than housing units. There’s quite a difference from the traditional owner-occupancy rate: the former puts national homeownership at 65%, but HPOP finds the real figure is closer to 53%. For adults under age 35, the gap is even more severe. The standard rate says 37% of under-35 households owned their home in 2024; HPOP puts the true number at just 22%.

The traditional 37% figure only reflects household heads—”about a third” of all adults under 35, one of the researchers, Erik Hembre, told Fortune. Once every adult in that age group is counted, the rate “drops down to 22% for everyone under the age of 35,” he said. “That seems like a meaningful difference to me.”

“More than one in 10 U.S. adults live in owner-occupied homes without actually being owners themselves,” researchers Hembre, Benjamin Horowitz, and Maxine Xu found, pegging the figure at 13.9% nationally. That’s because the old measure only checks whether a housing unit’s owner lives there—it says nothing about the adult children, roommates, or aging parents who also live under that roof without owning any stake in it.

Hembre said one figure inside that number surprised even him: 9% of all U.S. adults 18 and older live in an owner-occupied home as the child of the owner. “To me, that’s a big number, and I didn’t know it was that large beforehand,” he said.

And that blind spot isn’t evenly spread across age groups: It falls hardest on the young, since they are disproportionately the ones living in homes their parents or partners own, which is exactly why the under-35 homeownership rate has looked so much healthier than reality for years.

A cul-de-sac illustrates the illusion

The Minneapolis Fed researchers illustrate the distortion with a hypothetical five-house cul-de-sac. Owner-occupancy there reads as 80%, since four of five houses have an owner living inside. But once you count all 14 adults living on the street, only half actually own a home. The rest are grown children, partners, or extended family folded into someone else’s ownership statistic.

The new measure also captures people the old one ignores entirely—including nursing-home residents and students in dorms, who don’t show up in owner-occupancy data at all. And it reveals just how bad the youngest cohort’s trajectory has been over time: HPOP for 25-year-olds fell from 20% in 2006 to a low of 12% in 2015, and has recovered to just 14% by 2024–nowhere near pre-financial-crisis levels, despite recent headlines suggesting a young-adult homeownership rebound.

Hembre cautioned against reading too much doom into the youth numbers alone.

“It’s still true that most people, a majority of people, become homeowners at some point,” he said. “Our younger generation is still young. We don’t quite know what the future holds for them yet.”

However, the data does suggest that “at some point” is arriving later than it used to, and later than the standard 35-year cutoff might imply. He said it’s “completely reasonable” to look at other dynamics changing in the economy—an aging society, medical advancements leading to longer lifespans—and conclude that youth now lasts well into the mid-30s, in terms of homeownership.

At one point in our interview, I asked Hembre if he was a baseball fan, and he quickly said yes, and then didn’t disagree when I pointed out that his HPOP research resembles the invention of a stat called on-base percentage. Batting average was just about base hits, it simply didn’t measure the core goal of getting on base as well as the metric that included drawing walks—just like HPOP actually measures the head of household who also owns a home, instead of technically living inside an owned home.

“It’s why stats need to line up with what it is you care about as the outcome,” he said. “I’m not saying the old measure was wrong—batting average is still used,” he said. “But we think that this is an improvement.”

Hembre also said the study’s clearest surprise was how tightly housing affordability tracked the gap between HPOP and owner-occupancy at the state level.

“I was a little bit surprised at how strong that relationship was,” he said. “Often these correlations aren’t as tight as you might think.”

High-cost states like Hawaii and California show the largest drops between the two measures, while low-cost states like North and South Dakota show minimal differences—a pattern he attributed primarily to co-residency rates: how many young adults live with parents, or parents live with adult children. Still, he was careful not to overclaim causation. He said his paper was a “first step” and that more research on this was sure to follow.

Meanwhile, older millennials are pulling away

Generational researchers saw this fracture coming years before the Fed’s housing data confirmed it. Back in 2015, consultant Jason Dorsey argued millennials were splitting into two distinct cohorts—younger, more digitally native, financially strained versus older, more established, closer in outlook and means to Gen X. A decade later, that split looks less like a branding exercise and more like a housing-market fault line. Business Insider‘s Hillary Hoffower—later of this parish—reported in 2021 that the pandemic was deepening an intra-generational divide between the “millennial rich” and the “millennial poor.” Five years later, those divides are hardening.

The National Association of Realtors’ latest generational trends report found baby boomers remained the largest share of home buyers in 2026, while the overall first-time buyer share fell to a record low of 21%. Buried in that report is a widening split within the millennial generation itself. Younger millennials, age 27 to 35, saw their share of first-time buyers plunge from 71% to 60% in a single year. Older millennials, meanwhile, have become the highest-earning buyer segment in the market, posting a median household income of $132,700 and increasingly functioning as repeat, equity-leveraging buyers rather than first-timers, as Fortune reported.

That divergence tracks a broader wealth story that’s been building for years. Millennials’ total net worth has nearly quadrupled since 2019, rising from $3.94 trillion to $15.95 trillion by late 2024 — but roughly $2.5 trillion of that increase came directly from home-price appreciation among millennials who already owned property. The gains have been concentrated among those who bought early, disproportionately older millennials, rather than spread evenly across the generation. Younger millennials, meanwhile, remain locked out of the mechanism driving those gains. They also carry a heavier student-debt burden: 39% report student loans with a median $30,000 balance, compared with 27% of older millennials.

That divergence is not entirely abstract. Hembre and I are both 42, going on 43—right at the fault line the data describes. He said he got on the housing escalator “just perhaps a little too late as opposed to too early,” and his experience dovetails with his own research on affordability. “I certainly feel the issues.”

A pattern the Fed system—and the broader wealth data—has flagged before

The Minneapolis Fed’s findings echo warnings from elsewhere in the Federal Reserve system and beyond. Research from the Federal Reserve Bank of New York found adults under 40 held just 4.9% of total U.S. wealth as of 2019, despite making up 37% of the adult population—although under-40 wealth has grown 80% between 2019 and 2023, far outpacing older age groups. Although that particular dataset is unclear on the growth of wealth for the 35-and-older cohort, separate Fed data survey data, compiled by Fidelity, suggests those gains likely skew toward the older end of that bracket: average net worth for people in their 20s ($139,243) remains a fraction of the $549,600 average for those 35-44.

The Federal Reserve Bank of Boston has separately tracked a related trend: Older households are moving less often, while multigenerational living arrangements—the very dynamic that inflates the traditional owner-occupancy rate—continue to rise. The Fed’s own 2024 Survey of Household Economics adds an income dimension, finding only 35% of adults earning under $50,000 owned a home, compared with 85% of higher earners.

Taken together, the data suggest the story of millennial homeownership was never really about one generation lagging behind or catching up. It’s about a fault line running straight through the middle of it—separating an aging cohort now accumulating wealth the way boomers once did from a younger one that a flawed statistic made look far closer to catching up than it ever actually was.