Homeownership has been a hallmark of the Middle Class and adulthood in the United States. Yet, it continues to elude many of today’s young adults who are moving into their prime time to become home buyers. The impact of a generation’s failure to launch has been anecdotal until now.

U.S. homeownership rates have fallen to their lowest level since 1965. According to new Census Bureau data, the homeownership rate fell to 62.9 percent in Q2 of this year the same as it was in 1965, when they started tracking rates.

The homeownership rate was lowest among 18-35 year-olds (or Millennials) at 34.1 percent. This is lowest level in records dating back to 1994. Meanwhile, homeownership rates were highest among older Americans 65+ year olds at 77 percent. They attribute this to economic factors, including high student loan debt, high rents which make it difficult to save for a home, and flat incomes.

Renters jumped markedly by nearly 1 million units over the past year and household formation has been holding fairly steady. This suggests that young people are moving out on their own (leaving their parents’ basements) and renting their own apartments. Housing experts think this signals brighter prospects for homeownership in the future:

While the millennial homeownership rate continues to decline, it's important to note that the decrease could be just as likely due to new renter household formation as it is their ability to buy homes," wrote Ralph McLaughlin, chief economist at Trulia. "Certainly low inventory and affordability isn't helping their efforts to own, but moving out of their parents' basement and into a rental unit is also a good sign for the housing market."

"Broadly speaking, the falling homeownership rate is a sign that renting isn't only for those just starting out or making a transition, but is becoming an increasingly viable longer-term option for many households," noted Svenja Gudell, chief economist at Zillow.

Let’s not throw a party yet because Millennials are finally living their own "Friends" experience. Incomes in the Obama economy have failed to keep up with the rising cost of rent much more to leave room to save for a down payment. It will take a while for renters to become homeowners.

This is a critically important data point against a recent White House report that says student loan debt, which spiked under President Obama, is actually a good thing.

INDENT The homeownership rate for those ages 24 to 32 fell by 9 percentage points from 2005 to 2014. Over the same period the average student loan debt rose 42 percent… The back-of-the summary of existing research in Figure 39 shows modest homeownership effects from the increase in the levels of student loan debt.

Nice way to spin a significant concern.

We should be concerned about those defaulting on their loan balances who tend to carry smaller loan debt of a few thousand but did not complete their higher education and struggle to find work.

President Obama has proposed making community college tuition free. Vermont Senator Bernie Sanders thinks college should be free and former Secretary of State Hillary Clinton wants to make that happen at public colleges and universities. None of these proposals addresses the issue of why college costs are rising rapidly and would likely have unintended consequences.

Colleges have no incentive to control costs but actually increase tuition costs because of the guaranteed federal loans. Meanwhile, each year students increasingly take out more federal loan funding to cover the cost of college in hopes that they will repay it one day. Stagnant wages and high youth unemployment don't bode well for all young borrowers.

Our economy is reaping the effects of this vicious cycle. Homeownership delays are just one example.