The homeownership rate in the U.S. fell in the first quarter of 2011 to 66.4%, according to data released today by the Census Bureau. That was the lowest homeownership rate in slightly more than 12 years, since the 66.4% rate in the fourth quarter of 1998, and it looks like it will probably continue to fall in the coming years.
Conclusion: The political obsession with homeownership raised homeownership in the short run to an artificial and unsustainable level of 69% by 2006, but failed in the long run to stimulate homeownership at a sustainable level, and in the process government policy turned good renters into bad homeowners, created a housing bubble, waves of foreclosures, and a subsequent housing meltdown and financial crisis. In other words, the chart illustrates how government policies (monetary, mortgage market, GSEs, CRA, affordable housing, etc.) created an unsustainable "homeownership bubble."