Startling new housing data released this week could take the pep out of President Obama’s blitz of economic rallies, as they show homeownership dropping despite the push -- by him and his predecessors -- to prop up the market.

The new Census figures show homeownership dropped in the second quarter to an 18-year low of 65 percent. The rate, which hit a record 69.2 percent in 2004, has now fallen to its pre-housing bubble days nearly two decades ago.

The president, on the heels of the report, plans to head to Phoenix on Tuesday for a homeownership-themed stop on his multi-city tour -- part of his recent pivot back to the economy.

But it's unclear whether, given the government's track record, new federal policies could or should be used to help Americans realize their picket-fence dreams.

Richard Barrington, of Money Rates, argues that homeownership is returning to more reasonable levels, and that the government should not push folks into buying homes they can’t afford.

“In the heat of the housing boom, mortgage lenders pushed the envelope too far in terms of whom they allowed to qualify for a mortgage,” Barrington told FoxNews.com. “A more selective population of homebuyers should also be a more stable one.”

The housing industry has been lobbying hard lately for lawmakers to soften the country’s mortgage standards, making it easier for more Americans to buy homes. But it won’t be easy.

The re-calibrated reality, some say, is that jobs have been lost, the economy has tanked and the dream of homeownership for all has faded. First-time buyers and minorities are among the groups feeling it the most, the new Census Bureau data reveals.

That leaves lawmakers tasked with carving out a new set of housing regulations for eligibility that will need to strike a balance of keeping rates reasonable for riskier borrowers while making the market attractive for first-time buyers.

Over the next few weeks, federal regulators as well members of the Securities and Exchange Commission will test the waters on what to do next. They are looking for feedback on a provision in the Dodd-Frank Act of 2010 that addresses down payments. Lenders and consumer advocates argue against traditionally large down payments and warn that putting restrictions now will limit lending and drag down homeownership even more.

That puts the government in a tight spot because while they want to help borrowers they must also insulate an already-fragile housing industry from future financial shocks.

The new numbers raise questions about some of the mortgage policies enacted during the first four years of the Obama administration. Some have paid off while others landed with a thud.

The lapse in homeownership can’t be traced back to a single problem or policy. Instead, it is the complicated byproduct of a breakdown of the U.S. economy that dates back decades. Experts generally agree that no one president can take the blame for the housing crisis or the credit for a rebound.

In 2002, President George W. Bush set a goal of allowing 5.5 million low-to-moderate-income and minority families to buy a home. As big banks rubber-stamped risky loans, government-backed Fannie Mae and Freddie Mac bought up more of them to meet the targets set. In 2006, home prices peaked, the bubble burst and prices fell 35 percent, forcing millions of Americans to default on their loans. By 2008, the housing industry had turned toxic.

High foreclosure rates and poor consumer credit coupled with tougher lending laws stacked the deck against first time homebuyers and made it harder for people to qualify for mortgages. At the same time, home prices were crashing and the government was busy trying to stop the bleeding at Fannie Mae and Freddie Mac.

On the 2008 campaign trail, then-candidate Obama made lofty promises on how he would rebuild the crumbling housing industry. Soon after being sworn-in in 2009, he unveiled the Home Affordable Modification Program – the first in a series rolled out to revive the sector.

When HAMP was announced, the Obama administration said the foreclosure prevention program would throw 4 million American homeowners a badly needed lifeline. That didn’t happen.

A new report released in late July from the Special Inspector General for the Troubled Asset Relief Program said nearly half of struggling homeowners who got mortgage help in 2009 had re-defaulted on their loans.

While HAMP has helped 865,100 homeowners avoid foreclosures, 306,000 of those same homeowners found themselves back in exactly the same place they were pre-HAMP.

Christy Romero, special inspector general, recently told Reuters that the government still doesn’t know what went wrong.

"Exactly why people are falling out of HAMP isn't well understood by Treasury," she said. "If re-defaults are happening at an alarming rate, then you've got to stop that and change the program somehow where you stop the trend."

But it hasn’t been all misses for the Obama administration. The most successful initiative, the Home Affordable Refinance Program, allowed more than 2.2 million borrowers of Freddie and Fannie-backed loans to decrease their payments by refinancing at record low rates even if their homes had lost value. Big banks got on board with HARP because they were paid incentives to refinance to qualified buyers.

In April, the government extended HARP for another two years. It was originally set to expire at the end of this year.