No doubt many folks in the housing industry will disagree with this editorial from Friday's Wall Street Journal, but it is worth reading.
Economic statistics have their uses, but they can also lead to mischief when they’re misread or misused. The trade deficit comes to mind, and now so does the falling rate of home ownership in America. The latter is causing the usual suspects to worry about a housing crisis that isn’t.
The Census Bureau kicked off the mini-panic when it reported two weeks ago that home ownership hit a 51-year low in the second quarter. The last time only 62.9% of U.S. households were occupied by owners, Barry McGuire was topping the pop charts. But this doesn’t mean we’re on the eve of destruction.
Far from it, unless you forget that the home ownership rate peaked at 69.2% in 2004. That was amid the late and unlamented housing bubble. Politicians had made a fetish of the ownership rate during the 1990s and 2000s as a symbol of upward mobility. We even fell for it ourselves once or twice.