I would bet largely recreational use. See a lot of horses in Portola Valley and Woodside, and a few scattered in rural areas between San Jose and San Francisco, though it tends to larger numbers on a few plots and a couple of ranches specializing in either equestrian training or long time horse housing, and one never sees a single horse on smaller plots, most people who have enough land for one horse will have multiple for companionship to each other. This was also true when I lived outside of Houston a few decades ago. Working horses are pretty rare except for carriages meant for tourists and law enforcement anywhere close to urban or suburban areas.
Recreation 42%, Showing/Competition 29%, Other 19%, Racing 9%.
The recreation category itself is broad:
> One woman’s recreational horse is in the trailer and on the go to a
trail ride here, an overnight camping adventure there, and a special training clinic way out there, week in and week out. Another woman’s recreational horse is one of a half dozen at her home, and she might get a saddle on and ride over to the neighbor’s place a couple of times a month, if she is lucky enough to squeeze in some time for it.
> With horses, recreation can be just about anything you please, from primping and pampering to roughing it in the outback; from a zen-like search for the perfect circle or half pass (a lateral movement in dressage) to the discovery of inner peace as a volunteer in a therapeutic-riding program. The joiners have plenty of equestrian organizations, local to national, to add some socializing to the picture. The reclusive types can ride off into the sunset on solitary trails.
> That is a major appeal of horse involvement—something for everyone. And for a surprising number, the something is tending to their horses at least twice daily, forking manure and heaving hay bales; worrying over ailments, injuries, and feeds bills 365 days of the year; and having little time left over to actually use the animals. They do this year after year, and, when asked what they do with their horses, the answer is “just for pleasure.”
At its peak in 1920 the total horse+mule population was ~25M when the US population was 102M. Or 1 horse for every 4 people.
Although counts vary, there are 9M horses in the US today which has 330M people. Or 1 horse for every 36 people.
(population counts from US census)
Horse numbers from: http://www.cowboyway.com/What/HorsePopulation.htm