This research note estimates the number of American households and Americans that own REIT stocks directly or indirectly through mutual funds, ETFs or target date funds. We estimate that approximately 80 million adult Americans, or roughly 40 percent of American households, own REIT stocks.
The key sources of data for this analysis are the 2016 Federal Reserve Board Survey of Consumer Finances (SCF), the Employment Benefit Research Institute data on 401(k) equity allocations (EBRI), Census population and household counts, Census household income statistics and Nareit analysis of Morningstar Direct data on asset weighted REIT exposures by investment product type.
Defining Share of Households with Equity Ownership
The SCF reports that 51.9 percent of households have equity exposures1.This includes ownership through a tax deferred retirement account (87.8 percent), direct stock (26.9 percent), direct holding of pooled investment funds (18.9 percent), and trust or annuity (7.3 percent). The predominance of tax deferred retirement account based ownership will be used below as a key assumption.
Table 1 shows the number of households and associated number of adults per household as derived from SCF data.
Estimating REIT Ownership Among Equity Owners
As noted above, the dominant form of stock ownership is through a tax deferred retirement account, most typically through an employer sponsored 401(k) plan. EBRI estimates the average asset allocation in 401(k) accounts2. EBRI divides equity ownership vehicles into four categories, which are treated as mutually exclusive by EBRI and for this analysis. The four categories are equity funds, target date funds, balanced funds and company stock. The shares are shown in row (1) of Table 2.
For each of these four fund types we can estimate the share of assets that have REIT exposure using Morningstar Direct data. This analysis is done on an asset weighted basis and is shown in row (2) of Table 2.
- Generalist equity funds: 82 percent have some REIT exposure. For these purposes this is likely a conservative estimate because broad based passive funds are more likely to have REIT exposure and are popular in 401(k) plans.
- Target date funds: 95 percent of target date funds have REIT exposure.
- Balanced funds: Assumed to be the same as generalist equity funds.
- Company stock: Assumed to be 0 percent. This conservative assumption reflects the likelihood that the majority of people with individual stock exposures also have exposure to one of the three classes above.
Multiplying the share of fund ownership by the share of funds with REITs by the number of households with equities and summing across fund types yields the total number of households with REITs. As shown in row (4) of Table 2, over 51 million households (more than 40 percent of households) have REITs. Finally, multiplying the number of households by adults per household (1.57), yields approximately 80 million REIT owners.
Ownership by State
These estimates are decomposed to the state level using the relationship between equity ownership and household income and state household income distributions. Table 3 provides the estimates.
State ownership is estimated by deriving the share of households with stock ownership in five household income categories (<$25 thousand, $25 to $50 thousand, $50 to $75 thousand, $75 to $100 thousand, and more than $100 thousand) using Fed SCF data.
These ownership shares are then applied at the state level using census counts of households by income bracket. This yields an estimate of the number of households with equity ownership by state. The number of households with REIT ownership is derived by applying the same methodology used in Table 2.
 Federal Reserve, Survey of Consumer Finances, Federal Reserve Bulletin, September 2017, Box 6.
 Employment Benefit Research Institute, Issue Brief No. 436, 401(k) Plan Asset Allocation, Account Balances, and Loan Activity in 2015, Figure 21.