(Jason Alden/Bloomberg)

The official homeownership rate for just about every demographic in the country has been declining since the eve of the housing bust. And this is particularly true for the youngest potential homeowners under the age of 35:

By this Census data, homeownership for young adults is now at its lowest level since the Housing Vacancy Survey began collecting this data in 1982, suggesting that Millennials have either been sacked by the recession, or that their attitudes toward homeownership have begun to fundamentally shift. This trend, though, is a bit deceptive, for reasons of both demographics and methodology. As a result, Trulia chief economist Jed Kolko argues, we may be taking away some of the wrong lessons about the housing bust and where Millennial homeownership may be headed next.

How so? Let's start with what the Census Bureau's homeownership rate really captures. It reflects the share of all households that own their own home (as oppose to renting it). But as the recession kicked in, many families began to double up, as multiple generations combined under one roof, or as young adults moved back in with their parents.

Today, that process is reversing. Household formation is increasing. The denominator in the homeownership rate — the number of households in the country — is getting larger. This is particularly true for young adults setting out now on their own. What happens when the number of young adult households that own their home (the numerator) remains relatively steady but the total number of young adult households (the denominator) increases? The homeownership rate goes down.

It's possible, in other words, that the homeownership rate may decline even as the number of young adults buying a home increases. Or rather: The young adult homeownership may decline not because fewer people are buying homes, but because more are becoming renters. This is the picture of the official homeownership rate for 18-to-34-year-olds (it's significantly zoomed in from the picture above):

In contrast, if we calculate the homeownership rate as the number of young households that own their home relative all 18-to-34-year-olds — not just all 18-to-34-year-old households — we get this picture:

It shows young homeownership ticking back up in the past year — precisely because it takes into account the fact that the number of young adults heading their own householdsis simultaneously rising.

Now, Kolko's "true" homeownership rate still looks startlingly low compared to 1983. So what should we make of that? By his analysis, most of that drop over the last two decades can be explained by demographic shifts. Namely, the share of 18-to-34-year-olds in America who are married has been falling, and young adults are having children later in life. These are both milestones that often accompany homeownership. The share of 18-to-34-year-olds in America who are non-Hispanic white has also fallen significantly over this time. And for a variety of reasons having to do with wealth and credit, whites are much more likely to become homeowners than non-whites.

This means that today's 18-to-34-year-olds both look and behave differently as potential homeowners from 18-to-34-year-olds in 1983 in ways that are largely unrelated to the recession (we can have a separate conversation about economic reasons for why young adults are now marrying and having children later, and why minorities have less access to credit). But here's Kolko's takeaway:

In short: although the share of young adults who actually own a home remains considerably lower today (even with the uptick in 2013) than at any time since 1983, it is roughly at late 1990s levels after taking demographic shifts into account. Unless those long-term demographic trends reverse, there might be little room for young-adult homeownership to increase. You’d have to ignore demographic trends that pre-date the bubble to believe that young-adult homeownership will eventually return to its unadjusted pre-bubble levels.

Perhaps young adult homeownership is returning to a level that we should think of as normal, with demographics in mind. Adds Kolko: "Turning more millennials into homeowners, therefore, may not be the missing piece of the housing recovery after all."