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he national housing market has now regained enough momentum to provide an engine of growth for the U.S. economy, according to the latest e State of the Nation's Housing report released by the Joint Center for Housing Studies of Harvard University. Robust rental demand continues to drive the housing expansion, and sales, prices and new construction of single-family homes are on the rise. Even more important, income growth has picked up, particularly among the huge millennial pop- ulation that is poised to form millions of new households over the coming decade. At the same time, however, several obstacles continue to hamper the housing recovery — in particular, the lingering pressures on homeownership, the eroding affordability of rental housing and the growing concentration of poverty. e national homeownership rate has been on an unprecedented 10- year downtrend, sliding to just 63.7 percent in 2015. As Chris Herbert, managing director of Harvard's Joint Center for Housing Studies, notes, "Tight mortgage credit, the decade-long falloff in incomes that is only now ending, and a limited supply of homes for sale are all keeping households — especially first-time buyers — on the sidelines. And even though a rebound in home prices has helped to reduce the number of underwater owners, the large backlog of foreclosures is still a serious drag on homeownership." As these lingering effects of the housing crash fade, homeownership may regain some lost ground, but how soon and how much are open to question. Moreover, the report finds income inequality increased over the past decade, with households earning under $25,000 ac- counting for nearly 45 percent of the net growth in U.S. households in 2005–2015. As Herbert summarizes, "e question is not so much whether families will want to buy homes in the future, but whether they will be able to do so." Mirroring the persistent weakness on the owner-occupied side is the equally long surge in rental housing demand, with increases across all age groups, income levels and household types. With vacancy rates down sharply and rents climbing, multifamily construction is booming As the Housing Recovery Strengthens, Affordability and Other Challenges Remain RESEARCH T continued "Harvard Research" continued pg. 15 Harvard Research Center Releases The State of the Nation's Housing 2016 NEWS Existing-home sales grow 1.8 percent in May Existing-home sales sprang ahead in May to their highest pace in almost a decade, while the uptick in demand this spring amidst lagging supply levels pushed the median sales price to an all-time high, according to the National Association of Realtors. All major regions, except for the Midwest, saw strong sales increases last month. Total existing-home sales, which are completed transactions that include sin- gle-family homes, townhomes, condo- miniums and co-ops, grew 1.8 percent to a seasonally adjusted annual rate of 5.53 million in May from a downwardly revised 5.43 million in April. With last month's gain, sales are now up 4.5 percent from May 2015 (5.29 million) and are at their highest annual pace since February 2007 (5.79 million). Lawrence Yun, NAR chief economist, says existing sales continue to hum along, rising in May for the third consecutive month. "This spring's sustained period of ultra-low mortgage rates has certainly been a worthy incentive to buy a home, but the primary driver in the increase in sales is more homeowners realizing the equity they've accumulated in recent years and finally deciding to trade up or downsize," he says. "With first-time buyers still struggling to enter the market, repeat buyers using the proceeds from the sale of their previous home as their down payment are making up the bulk of home purchases right now." Surpassing the peak median sales price set last June ($236,300), the median existing-home price for all housing types in May was $239,700, up 4.7 percent from May 2015 ($228,900). May's price increase marks the 51st consecutive month of year-over-year gains. Total housing inventory at the end of May rose 1.4 percent to 2.15 million existing homes available for sale, but is still 5.7 percent lower than a year ago (2.28 million). Unsold inventory is at a 4.7-month supply at the current sales pace, which is unchanged from April. The share of first-time buyers was 30 percent in May, down from 32 percent both in April and a year ago. First-time buyers in all of 2015 also represented an average of 30 percent. S&P;/Case Shiller Home Price Indices: Home prices steadily gain in March S&P; Dow Jones Indices released the latest results for the S&P;/Case-Shiller Home Price Indices. Data released in late May for March 2016 shows home prices continued their rise across the country over the past 12 months. The S&P;/Case-Shiller U.S. National Home Price Index, covering all nine U.S. census divisions, reported a 5.2 percent 10 July 2016 QR QualifiedRemodeler.com IN BRIEF