A housing market recovery is under way, but it's not reaching everyone.

Despite more home sales and low mortgage rates, the homeownership rate fell for the eighth straight year, from 66.1 to 65.4 percent, according to the State of the Nation's Housing report from the Joint Center for Housing Studies of Harvard University.

Not counting homeowners over 54, homeownership rates are at their lowest point since recordkeeping began in 1976.

Editor's Note: Use This Single Loophole to Pay Zero Taxes in 2013

In the first quarter of this year, over 1.4 million homes, with 3.6 percent of all mortgages, were in foreclosure, the report says. That share is more than four times the 1974–99 average of 0.8 percent.

Millions of homeowners are delinquent on their mortgages and over 10 million homeowners owe more than their homes are worth.

In addition, severe housing cost burdens have set a new record, according to the report.

Specifically, 20.6 million households pay at least half of their incomes for housing, including nearly seven out of 10 households with annual incomes of less than $15,000, which is approximately equivalent to year-round employment at the minimum wage.

The latest increases in the number of severely burdened households represent an increase of 347,000 from 2010, 2.6 million from 2007 when the recession began and 6.7 million from a decade ago.

Weak income growth, eroding wealth and high debt loads are hindering the housing recovery, the report warns.

In 2011, median household income fell 1.5 percent in real terms from the year prior to stand 8.1 percent below the 2007 peak and 6.7 percent below the 2001 level.

"Tight credit is limiting the ability of would-be homebuyers to take advantage of today's affordable conditions and likely discouraging many from even trying," states Chris Herbert, director of research at the Center.

Other experts warn that the recent spike in mortgage rates could smother the housing recovery, as well as damper mortgage refinance and threaten consumer confidence.

"This stuff does feed back into the real economy," Russ Koesterich, global chief investment strategist at BlackRock, tells the Los Angeles Times.

"This is going to undermine that wealth effect that the [Federal Reserve] has been trying to create."

Mortgage rates have a huge impact on consumers.

A homebuyer acquiring a home for $368,000 with a 3.5 percent mortgage rate and 20 percent down would have a payment of $1,322, the Times notes. But with 4.5 percent, rate the homeowner would pay $1,492.

Editor's Note: Use This Single Loophole to Pay Zero Taxes in 2013