Homeownership rates are declining since a peak of 69.2% in fourth-quarter 2004, per the U.S. Census.

Mark Zandi frets about homeownership rates. We should listen to Mark; he’s chief economist at Moody’s Analytics, and one of housing’s smarter, plainer-speaking sages.

But should we worry? What does the quarterly headline about a declining homeownership rate have to do with our business?

Or, maybe the question is the other way around: what do our businesses have to do with the 10-year drop in homeownership rates from a peak of almost seven-in-10 American households (69.2% in Q4 2004), to today’s homeownership rate of 63.7%, which it hasn’t been since I was 12 (a long time ago)?

What we might worry about–from a business standpoint–is that homeownership rates may be heading so low and for such structurally unprecedented reasons that it will become more difficult to make a living in the for-sale new residential construction industry.

We think a home builder–large, medium, or small–should look at the data points as if looking into an aquarium tank, with interest perhaps, but not with invested attention. In fact, a healthy disdain for such data may be in order. Legendary coach John Wooden advises we focus on our character, not our reputation. Too, if home builders and developers focus on doing best what they do, homeownership rates–like a reputation, will take care of itself.

Wall Street Journal staffer Laura Kusisto quotes Zandi in her account of how the “U.S. Homeownership Rate Hits 48-Year Low,” based on data released yesterday from the U.S. Census’ Housing Vacancy Survey series. Kusisto’s Zandi quote is this:

“In general, I think rising homeownership is a plus for the economy and it signals a strong economy. The fact that it is falling is generally not a good thing.”

What we might well infer from Zandi’s quote here is that he believes–all things considered–that homeownership rates should be rising at this point, not falling. That demographics and the economy should have already established an earlier baseline, closer, say, to the 25-year average homeownership rate of 66.3%.

Quick relevant diversion. We’re currently at an offsite in Miami, which is busting out in cranes–once again, the state bird–from Bay Harbor Island down along Collins Avenue in South Beach. Dial back 10 or 11 years, and it would have been the “cabana boys” at our hotel beach front who would have been excitedly talking up their investments in multiple new condos in these locations.

New condos and construction cranes everywhere in Bay Harbor Island, Miami.

That’s not happening this year.

Point is, the high-point of almost 70% homeownership is now widely acknowledged to have been a fantasy-turned-nightmare, policy-fueled catastrophe. A certain percentage of that homeownership rate was pure fiction at every age level, and the process of the past decade has been to sieve out the population that would not have been there in the first place–cabana boys and executive assistants owning and flipping new condos, for instance.

A correction needed to happen. An over-correction is what, we think, has happened, as excesses and shortages balanced one another out. Which would suggest that an inflection point, where homeownership rates “hit bottom,” stabilize, and, perhaps, around some unseen corner in the months ahead, creep back up toward their 25-year norm.

Clearly, the blow to household balance sheets and consumer sentiment (remember, 9 million jobs were lost starting in 2008) contributed, in part, to the over-correction in homeownership. So, too, post-Dodd Frank regulation and lender business practices account for a chunk of the decline.

What’s still anybody’s guess has to do with the question of whether renting a home is “the right thing” for more people–a greater than 35% share of adults–in the U.S. economy going forward or not.

And a related question is, if that should be the case–that a greater percentage of U.S. adults should rent their home rather than own it–what does that imply for for-sale developers and home builders?

The big focus points on homeownership patterns tend to be on what’s going on with the 30-to-34 year-old population segment, and what’s happening with 35-to-39 year olds.  New Strategist Press editorial director Cheryl Russell looks at the trends here for those cuts of the greater adult pool, assuming that those two age-groupings tend to act as a proxy for “first-time home buyers.”

Fact is, when you look beyond the age-demographics of the decline in homeownership rates among Americans, and check out the numbers for income, you see the real story of the change. You can see in the Census release itself, on page 10 of the PDF, the breakdown of homeownership rates by “Family Income.” The rate of homeownership for families with incomes over and above the median family income only fell 4 percentage points during homeownership’s “lost decade” between 2004 and 2015.

For families with income below the median U.S. family income, the percentage drop in the homeownership rate was 7 points.

It probably means that, for many of those families, homeownership was not a reasonable proposition.

Now, the challenge of the economy is to get people in those income tiers to believe in and work for their ability to be economically mobile, to move into the “above median” income grouping, so that they too may enjoy the American Dream of homeownership.

That’s when the inflection point is likely to occur, when there’s a belief shift from skepticism about economic mobility to hopefulness.