Throughout most of our countries history, homeownership has been a big part of the American Dream. Lately, though, it is looking as if this dream is fading away. No matter how well the market seems to be recovering, homeownership rates continue to decline. Currently the rate is 64.8%, the lowest level since 1995.

Many people are worried about this percentage and what it could mean for the housing market. Huge influxes of investors have been introduced into the market, sweeping up property and renting it out. Because many of these investors are pulling back on purchases, there are too few lower-priced homes on the market.

With many new homes priced out, first-time buyers face tougher credit standards and higher down payments. Of course this is dragging homeownership down. Another concern is the small amount of homes being formed. Normally, formation is usually over one million households a year. However, in the year that ended on March 31st that number was cut in half and then some. Only 423,000 households were formed in the last twelve months.

Some believe that census data could be undercounting formation. These numbers don't include all rentals being created, which is a significant portion of all homes in creation. Perhaps the decrease in home ownership can be attributed to the rise in rentals. Adding more rentals to the market will help spur recovery as well as construction. A new era is upon us; and one that doesn't include owning a home.