Older, Wiser, Wealthier and Still at Home: Meet America’s Shadow Homeowners
Sam Williamson is senior economist at First American, Santa Ana, Calif.
Some of tomorrow’s homeowners are already here. They just haven’t moved out yet.
A growing share of young adults is living with family longer, pushing household formation, and in turn homeownership, further out. But not everyone living at home is equally close to buying a home. A 22-year-old finishing school and a 32-year-old with a steady income may both still live with mom and dad, but they’re likely at very different stages on the path to homeownership.
We refer to the second group as “shadow homeowners.” They’re young adults living with family who, based on their age, income, employment, and other characteristics, look more like future homeowners than their living arrangements suggest. Our latest research finds this group has grown substantially in recent years, and is increasingly concentrated among adults in their early 30s, pointing to a meaningful source of pent-up demand waiting just outside today’s housing market.
Peering Into the Shadows
We use Current Population Survey Annual Social and Economic Supplement microdata from 1995 to 2025 to estimate the size of the shadow-homeowner population. Our statistical model compares young adults living with family, including parents, grandparents, and other relatives, with similar adults who have formed independent renter or owner households. Using factors such as age, income, employment, education, marital status, children, and location, it estimates each person’s likelihood of forming a household and eventually becoming a homeowner. The figure below shows how this owner-ready population has changed by age group over time.
The pool has grown, but the bigger story is how it has shifted by age. From 1995 to 2025, the estimated number of shadow homeowners increased from about 1.0 million to nearly 1.3 million, a 30 percent jump. Yet the growth has not been evenly spread across young adults.
Start with the youngest adults. Among 20- to 24-year-olds, the estimated shadow-homeowner population has held roughly steady, at about 350,000, even as more people in this age group live with family. That suggests the at-home population has changed for this group. More early twenty-somethings are still finishing school, starting careers, and taking the steps that usually come before forming a household, let alone buying a home.
The story changes in the late 20s. Among 25- to 29-year-olds, the estimated shadow-homeowner population grew through much of the 2010s as more late twenty-somethings stayed at home. This group peaked around the start of the pandemic before declining as some moved out and those who remained appeared somewhat farther from homeownership. Even so, by 2025 the group was still larger than it was at the beginning of the study period.
The clearest shift is among adults in their early 30s. This group accounted for 60 percent of the growth in the shadow-homeowner population since 1995. By 2025, it reached a record 509,000, 39 percent of all shadow homeowners.
For many in this group, living at home looks very different than it does for those in their early 20s. These adults are more likely to have steady jobs, higher incomes, and family responsibilities, the milestones that often come before buying a home. In other words, these aren’t just young adults delaying adulthood; many are already at the life stage when homeownership typically becomes more realistic.
What Could Bring More Shadow Homeowners into the Light
The shift toward adults in their early 30s suggests the composition of shadow demand is changing. More of this pent-up demand now comes from people with jobs, incomes, and family ties, but not yet households of their own. The question is whether the market gives them a way to come into the light.
Improved housing affordability and accessibility could turn that pent-up demand into market activity. Affordability has improved from a year ago as mortgage rates eased, incomes grew, and house prices slowed, but the recent uptick in mortgage rates is a reminder that the path is not smooth. Further improvement in affordability, along with more supply of starter homes, would increase opportunities for young adults to leave home and purchase a home. Still, more than a million potential homeowners remain in the shadows, waiting for conditions that could bring them into the light.
(Views expressed in this article do not necessarily reflect policies of the Mortgage Bankers Association, nor do they connote an MBA endorsement of a specific company, product or service. MBA NewsLink welcomes submissions from member firms. Inquiries can be sent to Editor Michael Tucker or Editorial Manager Anneliese Mahoney.)
