Driven by rising home prices and growing demand, the U.S. housing recovery is well underway, So said The State of the Nation’s Housing report released by the Joint Center for Housing Studies of Harvard University. While still at historically low levels, housing construction has finally turned the corner. But millions of homeowners are still delinquent on their mortgages or owe more than their homes are worth, and severe housing cost burdens have set a new record.

Driven by an increase of 1.1 million renter households, last year marked the second consecutive year of double- digit percentage increases in multifamily construction. But the flip side of the strong rental market was the continued slide in homeownership rates. Even as historically low interest rates have helped make the monthly cost of owning a home more favorable than any time in the past 40 years, the national homeownership rate fell for the eighth straight year in 2012.

The Housing Vacancy Survey reports that the number of renter households increased by more than 1.1 million in 2011–12, the eighth consecutive year of expansion and yet another year when renters accounted for all net household growth. The million-plus annual increases in the last two years put growth in the current decade on pace to easily surpass the record 5.1 million gain in the 2000s While this rapid growth may not be sustainable, it attests to the unprecedented strength of rental demand. As of early 2013, renters made up 35 percent of all households.

The Harvard study and report is totally consistent with reports in major areas, such as central Mass.. The data reported ends in the first three months of 2013, but independent professionals have confirmed that the forecasts for continued increases in the statistics for the housing resale market have, in fact, come true. There has been a 10% increase in the average sale price of homes this year, as well as a 10% increase in unit sales. This couples with a decline in inventory levels of 34.5% over the past two years. The current level of inventory represents only a 3.1 month supply, based on the current sales pace.

However, some of the conclusions drawn by the study, while based on actual housing statistics, do not appear to be correct to some professionals. The study talks about a shift to a higher percentage of renters and a lower percentage of home owners. Some cite this as evidence of a long or intermediate term trend. Many homeowners were disenfranchised, due to the recession and the drop in home values. As home values return to pre-recession levels, many people who lost their homes to foreclosure will be eligible to buy homes again.

Relative to hind sight; interest rates have not been 3.66% since May and are not likely to be there again. Price appreciation will probably continue through August, but future reports will not be as positive. The biggest hurdle to absorbing the available inventory, including the vacant homes, is a more liquid credit market. Currently, banks and mortgage bankers are reluctant to lend, because of the added regulations relating to qualified mortgages and the potential liability from the Consumer Financial Protection Bureau (another self-governing agency). Also, counter to helping the credit markets, the Federal Housing Administration is reducing the maximum lending limits beginning January 1, 2014, which may translate to fewer purchases by owner-occupant borrowers.

Some also blame Washington for hindering lending. The greatest uncertainty in the market is the government regulation of lending and participation in secondary financing.