Americans still want to own their own homes, but can they afford them?

A study released today by Harvard University's Joint Center for Housing Studies find that the Americans want buy homes, but a bevy of financial burdens and market realities keep home ownership out of reach for many.

Elise Amendola/AP/File
A sold sign hangs in front of a house in Andover, Mass this May. A new study about the present state and future prospects of American homeownership was released Wednesday.

The American dream of homeownership is alive and well, according to a report released today by Harvard University's Joint Center for Housing Studies (JCHS). But the question of whether Americans who want to own homes will be able to afford them is less clear, due to the financial burdens of student debt, high rent prices, and the lingering effects of the housing market crash.

"The national housing market has now regained enough momentum to provide an engine of growth for the US economy, but obstacles continue to hamper the housing recovery," states a press release about JCHS's  annual "State of the Nation's Housing" report for 2016, issued Wednesday.

Homeownership levels are at a 48-year low in the United States, as the proportion of Americans who rent their homes has been rising, the study noted. Researchers looked at contributing factors to evaluate if those trends will continue, or if the share of home ownership will make a comeback as the Millennial generation moves further into adulthood.

Compared with earlier generations , Millennials are more likely to hit life milestones that tend to precede entering the housing market at older ages. They're more likely to marry later, for instance, or delay moving out of Mom and Dad's house. A report by Pew Research Center released last month shows that there are now more Americans between the ages of 18 and 34 living with their parents than there are living with a partner or spouse or sharing a living space with roommates.

The data shows is a significant drop from the number of millennials who were living with a spouse or partner compared with Americans in that age range in 1960, the Christian Science Monitor Monitor’s Josh Kenworthy reports.

The Harvard researchers, however, believe that as the generation ages these habitation trends will shift. They found that the number of households in the US (which does not refer to home ownership but to groups of people living together in units) is growing at a more normal pace – 1.3 million new households formed in 2015. They predict that this trend will increase to 2 million households formed each year in the coming years because of younger Millennials moving out of parents' homes.

The question remains of how accessible home ownership will be for these post-nest Millennials. The study noted that despite a labor shortage in the aging construction industry, more new houses are being built: Housing starts, or the number of houses that builders have begin construction on, climbed 10.8 percent to 1.1 million new units in 2015.

However, researchers found that most of this construction is geared toward wealthy homebuyers.

This finding appears to dovetail with a study released earlier this spring by real-estate listing website Trulia, which found a gap between mid-level and premium homes that are available on the market. This price gap "prevents starter homeowners from moving up and first-time buyers from moving in," the Monitor's Olivia Lowenberg wrote in March.

The Trulia study found that there are fewer so-called starter homes available for first time buyers – a 40 percent decline in inventory since 2012 – and that the homes that are available will require 5.6 percent more of a homebuyer's income than they would have in 2012, Ms. Lowenberg reported. This lack of affordable options coincides with other factors that are generally more favorable to buyers, including historically low interest rates. 

Another problematic trend identified in the Harvard study is the effect of high rents. Findings show that in 2014, 11.4 million renter households were paying at least half their income in rent – a record high. This leaves these households "severely" cost-burdened.

High rent takes a huge bite out of other necessities such as food, health care, and savings, the study said, and because only 25 percent of income-eligible renters receive public assistance for housing, the situation creates more housing instability and evictions, according to the center’s managing director Chris Herbert.

Material from the Associated Press used in this report.

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