Bumpy Road Still Ahead for Housing, Study Finds

A new study finds the glass is half-full for some of todays hopeful home buyers, but at the same time paints a not so rosy picture for many U.S. homeowners.

More Americans are able to afford a mortgage today than they were four years ago, according to a report released Monday from Harvard University's Joint Center for Housing Studies.

The report, "State of the Housing Market," found that nearly 70.8 million households could afford a median priced home in 2010, as opposed to only 48.2 million in 2007. This is assuming monthly payments are at 28% of their income, or about $900 in 2010. This is down from $1,362 in 2007, with a 30-year fixed-rate mortgage and 10% down payment.

But the glass is still half empty for many current home owners -- the home ownership rate continues to fall, dropping below 67% in 2010, down from 69% in 2004. This means there are more houses on the market and prices will continue to drop as demand remains low, the survey said.

The survey attributes a drop in demand to more children living with their parents for longer. In the past five years, an additional 1.6 million young adults are living at home.

Also according to the research, it wasn't the fancy mansions or upscale condos that were damaged most by the housing bubble. The survey found that the nation's modestly prices homes lost more value than pricier real estate during the recession.

Lower-priced homes fell about three times more in value than homes priced at the higher-end of the market, according to the report. Nearly 15% of homeowners today have properties worth less than their mortgages.

The Joint Center uses current data from the Census Bureau, the Department of Housing and Urban Development, the Bureau of Economic Analysis, the Bureau of Labor Statistics, the Center for Budget and Policy Priorities, the Conference Board, the Energy Information Administration, the Federal Housing Finance Agency, the Federal Reserve, First American CoreLogic, Freddie Mac, Moodys Economy.com, the Mortgage Bankers Association of America, MPF Research, the National Association of Realtors�, the National Council of Real Estate Investment Fiduciaries, the National Low Income Housing Coalition, the National Multi Housing Council, Standard and Poors, Real Capital Analytics, and Zillow.com to develop its findings.