Realty Check

Published: Friday, 24 Jul 2009 | 4:02 PM ET

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CNBC.com

Many moons ago, like back in the George W. Bush administration, home ownership was all the rage.

The "ownership society," some say, was the political impetus for the scandalous, irrational, negligent subprime lending that served to bring down the nation's economy.

So as the mortgage market unwound, the homeownership rate fell, and all the politicians kept quiet, because that was the right thing; that was the necessary punishment for collective irresponsible behavior.

In a quarterly report from the U.S. Census today, the homeownership rate actually rose, ever so slightly, from 67.3% in the first quarter of 2009 to 67.4% in the second quarter.

It's still well below the peak of 69.2% back in 2004 and a high of 69% at the height of the housing boom in 2006. It was the first slight bump up in a year.

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I didn't hear anything from the politicians yet, but I did hear some murmurings from housing industry watchers that that was a "good" sign.

The number of vacant homes declined in the second quarter, and that's definitely good, but the number of vacant homes for rent jumped by a big bit.

Rentals, especially at lower prices, compete directly with new construction. In fact, many rentals are new construction.

I would venture to say that I would rather see the homeownership rate fall, rent prices decline to a point where people take advantage of a financial respite, and the high inventories of the housing crash come back from the stratosphere. The big builders are positioning themselves for slow recovery, changing their product lines to become more competitive and hanging on to cash on their balance sheets, which is all good.

I'm all for an ownership society, when we all get back to the point where we can afford it.

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