Homeownership rates may have bottomed out, but they may see a slight future decrease before rebounding, says a study by the Mortgage Bankers Association’s Research Institute for Housing America. U.S. homeownership has dropped from its all-time high of 69.2% in 2004 to 66.4% in Q1 2011, a drop which the study describes as falling from an unsustainable level to something closer to historical averages.

The homeownership rate increase was most pronounced among the under-30 age group, and coincided with looser credit conditions and less-risk averse buyers, the study found.

“The question of why homeownership rates are falling now is really a question of why they were so high during the middle of the last decade,” said Stuart Gabriel of UCLA’s Anderson School, and one of the study authors. “From the late 1960s to the mid-1990s, U.S. homeownership rates were relatively stable between 64 and 65%. Our findings suggest that the boom and bust in homeownership rates over the last decade was driven in part by an initial relaxation of credit standards followed by a tightening of credit with the onset of the 2007 financial crash.”

Additionally, the study findings noted that homeownership is “deeply embedded” in American culture. “The recent sharp decline in the homeownership rate has symbolic as well as tangible adverse effects on the economy, with home sales and construction activity remaining near all-time lows,” said Michael Fratantoni, executive director of RIHA and MBA’s vice president of research and economics.

Written by Elizabeth Ecker