diff --git a/meta/classes/image-account-extension.bbclass b/meta/classes/image-account-extension.bbclass
index ea956cd5..3c461b1a 100644
--- a/meta/classes/image-account-extension.bbclass
+++ b/meta/classes/image-account-extension.bbclass
@@ -8,6 +8,10 @@
 USERS ??= ""
 GROUPS ??= ""
 
+# rebuild rootfs on change of USERS as homes might be moved / created
+# no need to depend on GROUPS as they don't create directories
+# groups need to be created before users, hence do not move the user creation into
+# the do_rootfs_install task but only add a dependency
 python() {
     for entry in (d.getVar("GROUPS") or "").split():
         group_entry = "GROUP_{}".format(entry)
@@ -16,7 +20,9 @@ python() {
     for entry in (d.getVar("USERS") or "").split():
         user_entry = "USER_{}".format(entry)
         d.appendVarFlag("image_postprocess_accounts", "vardeps", " {}".format(user_entry))
+        d.appendVarFlag("do_rootfs_install", "vardeps", " {}".format(user_entry))
 }
+do_rootfs_install[vardeps] += "USERS"
 
 def image_create_groups(d: "DataSmart") -> None:
     """Creates the groups defined in the ``GROUPS`` bitbake variable.