In hopes of promoting the narrative of a US housing recovery, one recurring thesis has been that as Millennials get older and start families, they will eventually leave their parents' basement and buy a house or shift from renting to owning. So far the facts have refused to corroborate this, and according to the latest "Housing Vacancies and Homeownership" report released on Thursday, the dream of owning a home just became even more distant. The reason: after staging a feeble rebound in late 2015, the US homeownership rate just tumbled from 63.5% to 62.9%, tied for the lowest print going back more than 50 years, to 1965.

As even the traditionally overoptimistic NAR has observed in recent months, as a result of soaring average home prices which have grown at a far faster pace than income or inflation, priced out first-time buyers have been struggling to find affordable properties despite low mortgage rates amid a tight supply of listings. As reported yesterday, home prices across the nation rose 5.2% in May from a year earlier per Case Shiller.

Cited by Bloomberg, Mark Vitner, a senior economist at Wells Fargo Securities LLC in Charlotte, North Carolina said that “one of the biggest hurdles now is affordability. Home prices are rising so much faster than incomes, so it’s hard for buyers to save for a down payment.”

One could almost call it a bubble, although not if one is the Fed.

And speaking of another confirmed bubble, namely rent, it appears to have finally popped, because according to the same Census report, after rising for the past three consecutive quarters, the median asking rent posted a surprising decline, sliding by 2.6% in Q2 to $847...

... driven by decline in all regions except the Northeast.

But before anyone concludes that renting is suddenly affordable, a chart showing the annual increase in the 4-qtr blended average shows that rents have a long way to go from here before there is an influx of renters, something which EQR complained about yesterday when it cut its guidance for the third time this year.