Did the so-called "American Dream" -- the one where everyone owns a house with a white picket fence -- die with the collapse of the U.S. housing market and its devastating aftermath?

A little, perhaps, but not entirely.

The end of subprime lending and dramatic declines in the price of homes has caused the nation’s home ownership rate to fall solidly from its historic high of 69% in 2004. Now economists and housing industry experts agree it’s going to be hard for the U.S. economy to fuel growth in home ownership rates, especially given the forecasts for five, 10 and even 15 years down the road.

“There aren’t a lot of positive long-term demographic trends or economic trends regarding the future of home ownership,” said Gary Painter, a real estate professor at the University of Southern California. “I think home ownership in this country reached its max historically in 2004.”

According to the U.S. Census, nationwide home ownership in the second quarter of 2008 stood at 68.1%.

While a decline of less than 1% might not seem significant, it’s the human equivalent of 2.4 million people no longer living in homes they owned since 2004.

Painter and other economists agree that even if Congress and the White House make housing a national priority, the possibility of passing 70% home ownership is probably remote.

“Many people should not, and some choose not to be homeowners,” said Edward Dodson, a former executive at mortgage giant Fannie Mae.

The nation’s home ownership rate hit its all-time high fueled mostly by record-high housing prices and a mortgage industry that basically rubber stamped mortgage applications. Now that the lax lending practices have ended and housing is no longer seen as an investment, it’s unlikely the rate will exceed its high any time soon.

A significant hurdle is the aging population of the U.S., economists said.

A January 2008 report in the Journal of the American Planning Association warned of a “generational housing bubble” that will come as the Baby Boomer demographic -- all 78 million of them -- ages, retires and eventually exits the housing market.

“The exit of the Baby Boomers from home ownership could have effects as significant as their entry, though with different consequences,” researchers Dowell Myers and SungHu Ryu wrote.

The Baby Boomers’ exit could start affecting the housing market as early as 2010, the year the housing market is expected to be in recovery mode from the current downturn, according to most Wall Street economists.

Another factor that will hold down home ownership rates is the end of lending practices geared primarily toward low-income families and minorities.

The term “subprime mortgage” has become almost as toxic as their related investments. But their original intent was to help people who could not qualify for standard 30-year mortgages achieve home ownership, often low-income and minority borrowers. The effort to aid minorities in particular was fueled by government studies suggesting that there was bias against mortgage applicants who were minorities.

Leonard Person, an African-American, bought his first home in Brooklyn using a low-documentation subprime mortgage. While the interest payment was high, it nevertheless allowed him to be the first in his family to purchase a home.

“I’m a direct benefactor of subprime mortgages,” Person said. “I got my chance to own an asset through subprime mortgages.”

He now owns several properties.

According to statistics from the Mortgage Bankers Association, the number of subprime and adjustable rate mortgages has fallen to negligible numbers this year primarily because of the credit crunch and subprime mortgage mess.

Economists said with those products now out of the system, less people will qualify for a home than before. The worry, however, is that some potential homeowners who should qualify for mortgages will be rejected because of the newly stringent lending practices.

“The theory behind subprime lending is not flawed,” Painter said. “Subprime lending will come back, but it will be smaller and less people will qualify for it. But it will come back."

At least one group believes home ownership can rise quickly to the 70% level - the National Association of Home Builders.

David Seiders, chief economist for the lobbying organization, said he believes immigration can push homeownership beyond 2004 levels.

Some Census data seems to support his argument. Hispanic home ownership rates have significantly outpaced their white and black counterparts since data was first collected in 1994. And despite home ownership rates falling since 2004, Hispanic home ownership has remained relatively stabile, hovering within a few tenths of a percent of the 50% mark.

"The so-called baby bust will be neutralized if immigration continues to hold up well," said Seiders.

So the dream may still be alive.