When experts discussed the state of the nation’s housing this week, they all concurred that yes, the recovery is underway, but outlined the hurdles that still must be crossed. Among them: a gap between white American and Hispanic and African Americans when it comes to home ownership rates, and continued credit challenges and homeowners who are delinquent on mortgages. Yet still, experts agree that now is the most affordable time to buy. And as mortgage rates start to increase, many homeowners are looking at purchasing in higher numbers.

The State of the Nation’s Housing report was released this week by the Joint Center for Housing Studies (JCHS) of Harvard University and experts discussed the housing market in detail during a news conference on Wednesday. While still at historically low levels, housing construction has finally turned the corner, giving the economy a much-needed boost. But even as the recovery gains momentum, 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, says the report.

“We are in a strong recovery,” said Eric S. Belsky, managing director of JCHS. “This includes the rental market and a pickup in construction. The big news was 2012 versus 2011 where the market was up 9 percent on existing home sales and 20 percent on new home sales. We have had strong gains in home prices and very tight inventories. When you see a market that continues to drag through that means there is more momentum.”

Despite these good news indicators, including historically low interest rates, he pointed out that “the national homeownership rate fell for the eighth straight year in 2012. The drop was especially pronounced for 25–54 year olds, whose homeownership rates were at their lowest point since recordkeeping began in 1976.”

“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,” said Chris Herbert, director of research at the JCHS. “At issue is whether, and at what cost, mortgage financing will be available to borrowers across a broad spectrum of incomes, wealth and credit histories moving forward.”

All agreed that affordability is at a high.

“It is a very affordable time to buy a home,” said Belsky. “With rental rates rising it costs less to buy than rent. Rates would have to go up two to three points until affordability was a constraint.”

“I think we all agree with Eric that we have a long bandwidth before a rise in interest rates would impact the recovery,” said Debra Still, chairman, Mortgage Bankers Association. “But it is helping get some folks off the fence.”

George McCarthy, director, Metropolitan Opportunity, Ford Foundation, addressed the low rate of home ownership among minorities.

“The gap between white American and Hispanic and African Americans are as wide as it has ever been,” he said. “If people [minorities] can’t get in now they won’t enjoy the first of building wealth through home ownership.”

The panelists also discussed the issue of credit lending standards.

“We are still trying to find that right place between allowing people to buy and giving credit to anyone which is what got us in this problem in the first place,” said Still.

All in all, though, the rise in residential construction is providing a much needed jolt to the economy.

“With rising home prices helping to revive household balance sheets and expanding residential construction adding to job growth, the housing sector is finally providing a much needed boost to the economy,” said Belsky.