Although the high and growing home-ownership rate during the nineties in the US is known as one of the determinants of the later property and subprime crisis, many countries like Germany still have the further increase of the home ownership rate on the political agenda. This paper has to parts. In the first part an overview of the theoretical framework to understand the renting of a flat as a type of debt finance contrary to the home-ownership, which is interpreted as a form of equity finance is given. Identifying renting as a financial issue, modern financial theory from Oliver Williamson, based on transaction cost economics in the form of rules on optimal capital structure can be applied to answer the question of optimal proportion of home ownership. We do know that financial intermediation and debt are crucial for income growth and wealth. Therefore it should also be possible to see low home ownership rates in areas with high income. As for Williamson the idea of asset specificity is important, we can also assume, low home ownership rate will be found in areas with a high density of population. In the empirical part of the paper both aspects are analysed with data from all administrative districts of the former part of West-Germany.