In spite of ongoing foreclosure moratoria and other administrative delays that you might expect to keep homeowners – even the distressed ones – in possession of their homes for longer periods of time, U.S. homeownership rates hit a 13-year low at the end of 2010[1]. While some analysts believed that homeownership might actually rise slightly in the wake of the robo-signer fiascos that threatened to stall many lenders’ foreclosures indefinitely, the Census Bureau reported this month that homeownership fell another 0.4 percent in the final quarter of 2010, bringing homeownership rates to a point not seen since before the turn of the century.

Not surprisingly, rental vacancies have also seen a sharp decline in recent months as homeowners either willingly or unwillingly are compelled to find places other than their own homes to stay. In fact, nationwide, rental vacancy rates are currently at 9.4 percent of available units, which “represents the biggest quarterly decline in rental vacancies…since the [Census] Bureau began tracking the data.” 35-44 year-olds are the most likely to relinquish their homeownership at this time, and the western states have the lowest homeownership rates with an average of 61 percent.

Some economists think that all of these signs point to the housing market coming “full circle” since current homeownership and rental statistics are back at 1998 levels[2]. Do you think that this means that the housing market is slogging its way toward a recovery, or do you think that rentals are the place to invest because our market is going to shift toward rental properties in the future?

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[1] http://community.nasdaq.com/News/2011-01/home-ownership-lowest-in-13-years.aspx?storyid=55520

[2] http://www.economist.com/blogs/freeexchange/2011/01/housing_markets_0