Today we received two interesting housing indicators that reflect the new normal in our echo bubble real estate market. Case Shiller reported that the U.S home price index fell during May. Surprisingly the 10-city and 20-city composite indexes were both 0.2 percent lower from April to May. On a year-over-year basis home prices rose by 4.4 percent. The trend of smaller year-over-year prices gains remains intact, not surprising considering the deflationary forces piling up in the economy.

In related news, the Census Bureau reported updated figures for second quarter homeownership and vacancy rates. The U.S. rate of homeownership fell again in the second quarter of 2015, dropping to 63.4 percent. That’s a fresh 48 year low in the rate of homeownership, but not surprising considering the increase in prices across various markets in the country. Not accounting for inflation, home prices in Dallas Texas are now solidly above the previous 2006 bubble peak. How’s that for declining affordability! Professor Anthony Sanders provided the chart above which shows the demise of American homeownership. Home price growth is still more than 2 times average wage growth in the U.S., and this is a big reason why the rate of homeownership continues to fall.

For companies like American Homes 4 Rent and Blackstone who feast on the Fed’s bountiful liquidity, it has been a nice recovery. For everyone else, the “recovery” leaves a lot to be desired.

The Federal Reserve has been gobbling up mortgage backed securities to keep interest rates pinned down, but this doesn’t help much when the price of the house spirals out of reach for most families. The Fed can goose asset prices, but trickle-down monetary is no more effective than trickle-down economic policy.