The Census Bureau reports that the homeownership rate declined to 67.8% in Q4, from 68.2% in Q3 2007. This is a huge drag on the U.S. housing market.

... there are about 1.65 million excess housing units in the U.S. that need to be worked off over the next few years. These excess units will keep pressure on housing starts and prices for some time.

From the archive:

Is It Better to Buy or Rent?

By the Realtors’ way of thinking, it’s always a good time to buy. ... But in a stark reversal, it’s now clear that people who chose renting over buying in the last two years made the right move. In much of the country, including large parts of the Northeast, California, Florida and the Southwest, recent home buyers have faced higher monthly costs than renters and have lost money on their investment in the meantime. It’s almost as if they have thrown money away, an insult once reserved for renters.