Home-ownership seems out of vogue. Does that mean the American dream is dead? Also we’ll get an update on mortgage purchase applications, interest rates, and thoughts on home affordability. Want more articles like this? Create an account today to get BiggerPocket's best blog articles delivered to your inbox Sign up for free Home-ownership Declines: Renter Nation is Back The Census Bureau reported that home-ownership continues to decline. It’s estimated now that home-ownership has declined to 66.5%, down from the peak of nearly 70% in 2004. The decline in ownership rates is accelerating after holding steady for 2 quarters at 66.9%. The mean is around 65% and it looks like ownership rates are headed back to the mean. On another note, the rental dwelling vacancy rate was down to 9.4% from 10.7% in Q3. This is good news for investors. If you plan on owning or own property, there are more renters now than in nearly 6 years. Rental housing has become very attractive as evidenced by the decline in rental vacancy rate. Others would argue that this is a big dent in the American dream. Maybe the American dream is changing. What if the new dream is land-lordship? Interest Rates Unchanged With an improving economy and inflation remaining in check, Freddie Mac reported flat mortgage rates for the week. The 30-year fixed rate held steady, inching up 0.1% from 4.80% to 4.81%. The 15-year fixed was also flat, down 0.1% to 4.08%. Core inflation increased 0.4% the lowest since 1959 when records started being kept. This coupled with increased consumer spending allowed for favorable conditions in the bond markets. Stability has dominated the first part of 2011. This is exactly what the market needs. Further the National Association of Realtors reported that due to low rates and home prices, housing in Q4 was the most affordable on record. Mortgage Activity Gets a Boost The Mortgage Bankers Association reported a big increase in mortgage activity as the Market Composite Index increased 11.3% from the prior week ending January 28th, 2011. The Refinance Index increased 11.7% while the Purchase Index increased 9.5%. The number reflect increases over a holiday week. The 4-week moving average is up 1% for refinances and down 1.5% for purchases. Weak mortgage activity has been the story in early 2011. As I mentioned last week, I think this is concerning and will directly affect the recovery when February home sales come out. We may see mild improvements despite this as numbers are off of deep lows. Low activity can negatively affect home prices as that means less foreclosures will be offset by normal home sales. Parting Thoughts Homes have never been more affordable, at least according to NAR. Think about that. That’s a pretty big statement. So homes are cheap, interest rates are cheap, what’s keeping people from buying? A lot of Americans don’t qualify. The CoreLogic Negative Equity Report showed that 22 million Americans are underwater on their homes. This has created a somewhat immobile workforce which is hampering the overall economic recovery. For those that do qualify to purchase there isn’t enough optimism in the market to do so. This leaves a special opportunity for investors. If you do qualify to purchase the conditions are near perfect to do so, period.