The homeownership rate declined further in the latest data, with 65.5% of households owning their homes in the first quarter of 2012. At the peak, 69.4% were homeowners. Though a 5% decline may not sound too large to a casual observer, in a country with over 100 million households the figure represents a swing of 5 million families and households.

A review of historical homeownership shows that the number of homeowning families rise by about 1 million each year. But over the past six years, with the collapse of the housing market bubble, the total number of homeowners has fallen by a million, rather than adding 6 million as the historical relationship would have implied. On the flip side of the coin, the number of renters has shot up by 5 million over the same time period.

Real estate investors are trying to take advantage of the latest trend. Last year investment property purchases surged. Unlike the housing bubble years when investors were able to take out easy/funny mortgages, the current set of investors are going in predominately all-cash. Just this fact alone assures that the current real estate market is settling on very solid ground and a recovery in the housing market will be genuine and sustainable.