The homeownership rate increased during the second quarter, however some experts were quick to point out that it remains near 50-year lows.

The latest report from the U.S. Census Bureau showed the homeownership rate increased by 0.1 percentage point from last quarter and 0.8 percentage points from last year to 63.7% in the second quarter.

One economist explained the $7 trillion in housing wealth gains from the cyclical low is going to a lesser number of families as the homeownership rate remains low.

“The addition of 1.2 million households being homeowners is clearly good news, as more households are participating in housing equity gains,” said Lawrence Yun, National Association of Realtors chief economist. “But let's keep it in perspective: there are fewer homeowners today compared to a decade ago, while renter households have risen by 8 million.”

“So it is still the case that the massive $7 trillion in housing wealth gains from the cyclical low point has been accumulated by a fewer number of families in America,” Yun said. “Further advances in homeownership are required to strengthen and broaden the middle class.”

But despite the grounds still to make up, the second quarter’s increase was still a step in the right direction.

“It turns out last quarter's surprise increase in the homeownership rate may be more than just a statistical blip,” Trulia Chief Economist Ralph McLaughlin said. “For the second consecutive quarter, the number of new owner-occupied households formed outpaced renters.”

“Indeed we may have turned a corner when it comes to the steep dive in homeownership we've seen over the past 10 years,” McLaughlin said.

This increase shows homebuyers, including first time homebuyers, are being able to purchase a home even in the intensely competitive environment. Why? Because renting is even less affordable.

“Despite very little for-sale inventory, intense competition and worsening affordability, hundreds of thousands of renters are finding ways to transition into homeownership, pushing the national overall U.S. homeownership rate up alongside the national rental vacancy rate,” Zillow Chief Economist Svenja Gudell said.

“Equally encouraging, many new homeowners in Q2 appear to be young, likely first-time home buyers, the homeownership rate among those 35 and younger rose strongly in Q2 and now stands above 35%, its highest level since 2015,” Gudell said. “We may never get back to the homeownership highs experienced during the bubble years, but a strong labor market and high rents are certainly making homeownership very attractive to many Americans.”

However, the homeownership rate increase is not immune to the housing shortages, which could hold back any more potential increases.

“The homeownership rate hit a three-year high in the second quarter, as a strong labor market contributed to a gradual rise in the number of first-time buyers,” Capital Economics Property Economist Matthew Pointon said. “But the fact that the homeowner vacancy rate hit a 17-year low is a reminder that the lack of inventory will act as a drag on the pace of any rise in homeownership for the foreseeable future.”