There's a simple reason the percentage of people owning a home is at a historic low

home house construction

(A new house being built in a suburb located north of Toronto.Mark Blinch/Reuters)

One of the most trumpeted economic statistics over the past few months has been the 51-year low in the homeownership rate. Even Republican presidential nominee Donald Trump has started to use the chart at his rallies to go after President Obama.

The problem with citing the statistic as emblematic of weakness in the economy (much less using it as an indictment of an entire presidency) is that it ignores a simple fact: Millennials want to get educated.

Or at least that's the essence of an argument from Mark Fleming, the chief economist at First American Financial Corporation, who tells Business Insider that the housing stock that was built up over the previous 30 years is more than enough for the demand that young people are putting on the market as a whole.

According to Fleming, millennials are the "most educated generation." It is true that 36% of people in the US ages 25 to 34 have a bachelor's degree, while only 26.7% of those 65 or over have a similar degree. In Fleming's opinion, this is lowering the level of demand for housing across the country.

"If you're going to school for longer, you're more likely to put off things like marriage or buying a home or having a kid," Fleming tells Business Insider. "So this has shifted young people's demand out further compared to their parents' generation that was entering the housing market at a younger age."

At the same time, Fleming said, the stock of homes that has been built up over time has more than kept up with new household formation.

Looking at Census data on the number of total households (defined by the Census Bureau as a person living alone or a group of people living together, related or not) and houses built, it appears that the housing stock available to households has remained roughly the same.

In 1973 (the earliest year the data was available), there were 51,287,000 single-family houses for 68,250,000 households, or one home for every 1.33 households. In 2013 (the most recent data), there were 91,173,000 homes for 122,460,000 households, or one home for every 1.34 households. So, housing supply has kept up with household growth over the past 40 years.

Even with the underwhelming supply of new homes coming onto the market right now, Fleming says, the boom in single-family building from 1970 onward has left the US with enough long-term oversupply to have the ownership rate drop over time, especially coupled with young Americans now being inclined to wait longer before buying. (He acknowledges, however, that there might be some supply constraints in certain areas.)

So, at the very least, the supply of single-family homes that the US is building is staying consistent with household growth, while, according to Fleming, those households being formed may be delaying the decision to purchase a home.

Thus, you have more total homes available, and the same number of homes per households, but fewer people looking to move in. And since the homeownership rate is the number of households who live in houses they own, keeping the housing supply constant while seeing a smaller proportion of new households looking to own could be driving the rate down.

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