Homeownership rates in both California and across the United States remained below their respective 40-year averages last year. This trend occurs four decades after significant tax reforms were enacted to encourage property ownership, suggesting minimal long-term progress in boosting ownership shares.

California's Stagnant Ownership Landscape

2025 Performance Metrics

California recorded a homeownership rate of 55.3% in 2025, which ranked as only its 20th best performance level since 1986. This figure places the state near the middle of its historical range over the last four decades.

The state's rate was the third lowest among all states, trailing only New York and the District of Columbia. Nationally, the US ownership rate stood at 65.2% in 2025, meaning California lagged the national average by 9.9 percentage points.

Historical Context and Comparison

The 9.9 percentage point gap between California and the national rate in 2025 matches the average difference observed over the past 40 years. In 1986, Congress attempted to incentivize ownership by reducing tax advantages for landlords while keeping mortgage interest as a primary consumer tax deduction.

In a separate reporting of 2025 data, California's rate was listed as 55.8%, still third worst nationally, behind the District of Columbia and New York. The highest state ownership rates were recorded in West Virginia at 76.1%, followed by Michigan and Maine at 74%.

National Trends and State Rankings

US Ownership Declines

Nationally, the US ownership rate in 2025 was off by 0.4 percentage points compared to its historical standard. Roughly half of all states failed to meet their historical ownership benchmarks last year.

California's 2025 rate was half a percentage point below its own average, mirroring the national deficit. Twenty-five states experienced declines in ownership rates, with Idaho leading the drop at 3.3 percentage points.

States Experiencing Significant Shifts

Other states seeing notable declines included Oklahoma, which fell by 3 percentage points, and Colorado, down 2.8 percentage points. Oklahoma was 5.7 percentage points below its average, while North Carolina was 4 points below.

Conversely, some states achieved record highs. Vermont posted its highest rate at 75.3% in 2025, marking a 3.6 percentage point increase above average. Hawaii (60.9%) and Rhode Island (65.1%) both recorded their second-best years for ownership.

Legislative Efforts and Affordability Hurdles

These statistics underscore widespread national frustration regarding housing affordability challenges for prospective buyers. Legislation like the ROAD Act is currently awaiting House action, aiming to address these issues.

The proposed bill seeks to restrict the involvement of certain large institutional investors in the housing market. Proponents suggest that without such measures, decades of government efforts to boost ownership may yield minimal tangible results.