The nation’s homeownership rate held steady at 66.9 percent during the third quarter of this year, according to government figures released Tuesday.

With foreclosure cases still mounting, bank repossessions at an all-time high, and a growing number of consumers

abandoning the idea of the “American Dream,” homeownership is at its lowest mark since the end of 1999. The national homeownership rate has fallen 0.7 percentage points over the past year.

Based on Census Bureau data, for the third quarter of 2010, homeownership rates were highest in the Midwest (71.1 percent) and lowest in the West (61.3 percent). Rates in the South (69.1 percent) and the Northeast (63.9 percent) fell in between. Homeownership levels in all regions except the Northeast were lower than a year ago.

According to the Census Bureau’s latest report, approximately 85.6 percent of the housing units in the United States in the third quarter 2010 were occupied and 14.4 percent were vacant.

With a glut of unsustainable mortgages still weighing heavy on housing markets across the country, many analysts are making a case against the government’s long-time persuasion that every American should strive to own a home.

At a housing finance summit organized by the Obama administration this summer, Mark Zandi, chief economist for Moody’s Analytics, told regulators and other market participants, “The housing market is over-subsidized. Homeownership isn’t for everyone.”

Zandi said this point has become painfully clear by the sheer number of foreclosures occurring today. Bill Gross, co-chief investment officer for Pimco, sided with Zandi on the idea that the nation’s implicit all-access to homeownership must be a thing of the past.

For decades, Gross said, America has been “over-housed” and “over-consumed.”

Not only is renting gaining ground as the most practical means of housing for a larger number of consumers, but some say it could also be the answer to keeping millions of struggling borrowers in their homes and stabilizing foreclosure-ridden communities.

Earlier this year, Rep. Raúl M. Grijalva (D-Arizona) introduced the Right to Rent Act (HR 5028). The bill would allow homeowners who’ve been foreclosed on to stay in their homes at a fair market rental rate.

Under the language of the proposed legislation, the homeowner, upon receiving notice of foreclosure, would have 25 business days to petition the court to grant tenancy for up to five years at a rate determined by a court-appointed appraiser.

A model similar to HR 5028 has been enacted on a limited basis by Fannie Mae, Freddie Mac, and some fully private lenders.

Grijalva says the legislation would prevent the spiral of crime, social problems, and plummeting property values that can follow mass vacancies, but the bill has been sitting with the House Financial Services Committee with no apparent movement or debate since April 15th.