Earlier today the Census Bureau released the homeownership and vacancy rates for Q2 2010. I posted a few graphs this morning, and I noted that the homeownership rate had fallen to the 1999 level of 66.9%. A few years ago – when the homeownership rate was at 69%, I forecast that the rate would probably fall to the 66% to 67% range. Here is a repeat of the graph from this morning showing the trend of the homeownership rate since 1965. Click on graph for larger image in new window. Note: graph starts at 60% to better show the change . As I noted this morning, the homeownership rate increased in the ’90s and first half of the ’00s because of changes in demographics and “innovations” in mortgage lending. My guess is the increase due to demographics (older population) will probably stick, but the mortgage “innovation” increase will disappear. Using the data from the Census Bureau on number of households per age cohort, we can calculate what would have happened to the overall homeownership rate if the rate per age cohort had stayed the same as in 1989 or in 1999. Using the 1989 percentages, the homeownership rate would have increased from 63.9% in 1989 to 66.2% in 2009 just because of the aging population.

Read more here – How far will the homeownership rate fall?