Although the housing market is recovering and more properties are being built, potential owners and renters face stiff challenges in finding an affordable place to live, according to the Harvard Joint Center for Housing Studies.

“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,” says “The State of the Nation’s Housing” report issued Wednesday.

Financial advisors say many of their clients are unable to buy homes or are sacrificing retirement and other savings to do so.

Lingering pressures on homeownership, eroding affordability of rental housing, and the growing concentrations of poverty are preventing the housing market from returning to a truly healthy condition, the report says. The national homeownership rate has been on an unprecedented 10-year downward trend, dipping to just 63.7 percent in 2015.

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.

“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,” he adds.

As these lingering effects of the housing crash begin to fade, homeownership may regain some lost ground, but how soon and how much are open to question, the Joint Center for Housing Studies says.

“The question is not so much whether families will want to buy homes in the future, but whether they will be able to do so,” Herbert adds.

The burden of student debt for recent graduates also impacts the housing market, says Dave Geibel, senior vice president and wealth advisor at Girard Partners, a Univest Wealth Management Firm in King of Prussia, Pa.

“For millennials, everything is delayed,” Geibel says. “The reason the housing market has changed is because of demographics. Millennials cannot start saving for a house if they are saddled with student debt. I have four millennials working for me and none of them own homes. However, I do not buy this notion that young people do not want to buy homes.”

The fact that millennials cannot buy their starter homes and are living at home with parents, who therefore cannot downsize from their family homes, is affecting the housing market in several ways.

“This is impacting the housing market by causing decreases in housing inventory, rising costs and lack of movement in the starter home market,” says Christopher Krell, a principal with Cassaday & Company Inc., a financial advisory firm in McLean, Va. “When the entry level buyers stop buying, it hurts the entire buying chain.”

On the rental side, multifamily construction is booming but there has been a surge in demand across all age groups, income levels and household types that is forcing prices up. At the same time, the report says, much of the rental construction has been aimed at the high-income market. “Rents [are] well out of reach of the typical renter making $35,000 a year,” the report says.

“A lot of consumers are sacrificing their 401(k) savings to buy a home,” says Michael Brady, founder and president of Generosity Wealth Management, a financial advisory firm in Boulder, Colo.

“They have to divert their resources to a future home,” he says, “but if they are renting they need the discipline to save for retirement and not spend it.”

Looking at the rental situation from an investors’ point of view, apartment buildings might be the place to be, according to Kenny Elkins, a wealth manager at Equity Concepts in Richmond, Va.

“REITs with multifamily housing are one of the strongest and fastest growing types of asset classes in real estate right now. It is a good opportunity for investors, as long as the REIT is diversified among many buildings,” Elkins says.

Housing challenges are hitting low-income families the hardest.

“Because of the widening gap between market-rate rents and the amounts many households can afford at the 30-percent-of-income standard, the number of cost-burdened renters hit 21.3 million in 2014. Even worse, 11.4 million of these households paid more than half their incomes for housing, a record high,” the report says.

“Low-income households with cost burdens face higher rates of housing instability, more often settle for poor-quality housing, and have to sacrifice other needs — including basic nutrition, health, and safety — to pay for their housing,” according to the report.

Although most clients of financial advisors may not be scrimping on food or health, they are sacrificing savings and retirement funds to buy a home for themselves or their adult children.

“Trying to buy a house for many blows up the retirement savings,” says Mark Kemp, founder of Kemp Harvest Financial Group in Harleysville, Pa. “Other clients of ours are trying to figure out how they are going to pull off their own retirement, and then they want to give money to the kids to buy a house. They doom themselves to failure.”

Governments have made some efforts to help in the housing crisis, but the lack of a strong federal response has left state and local governments struggling to expand rental assistance and promote construction of affordable housing in areas with access to better educational and employment opportunities through inclusionary zoning and other local resources, the report says.

But Herbert from Harvard’s Joint Center for Housing Studies adds, “These efforts are falling far short of need. Policymakers at all levels of government need to take stock of what can and should be done to expand access to good-quality, affordable housing, which is so central to the current well-being and potential contribution of each and every individual.”