The American dream is increasingly just that - a dream. Since the 2008 recession, owning a home has been a realistic goal for a shrinking number of people.

In 2014, the national homeownership rate slid for 10th consecutive year to 64.5%, reaching lowest homeownership in 20 years, according to a report released by Joint Center for Housing Studies at Harvard University.

Even as US is on the path to recovery and unemployment has dropped to 5.5%, homeownership rate still continues to fall. In the first quarter of this year, it has dropped to 63.7% – lowest quarterly rate since early 1993.

This drop in homeownership “erases nearly all of the increase from the previous two decades”, according to Chris Herbert, managing director of the center. He added that “the trend does not appear to be abating”.

Home ownership is not just slipping through the fingers of the younger millennial generation. The homeownership rate for those 35 to 44 years old has fallen the most and is down 5.4% since 1993. Their homeownership level is down to the levels not seen since the 1960s.

There are many different factors that are contributing to this trend – from high student loan debt among younger Americans to rising home prices and stagnant incomes to tougher lending standards.

“I believe homeownership is down due to banking regulations that have required larger down payments – 20% to 25% – to purchase,” Jeremiah Doyle, a New York broker at Compass, told the Guardian.

“This has made purchasing a home unattainable for many. On the flip side, some of my recent customers have been able to get loans where the banks have only required 10% of 15% down. I think homeownership will start to increase with these lower downpayment requirements as long as interest rates remain low.”

The Federal Reserve is expected to begin increasing interest rates later this year.

Lack of construction to meet an increase in demand for both rental and for purchase has contributed to increase in cost of housing in the US.

“My seller has owned his current apartment for 11 years and decided that right now would be a great time for him to sell as the sales market in NYC is very tight,” said Chris Ritchey, another New York broker at Compass. The same client is now planning to rent for the next two to three years.

“Due to soaring housing costs, especially in larger metropolitan areas, even with almost doubling his original investment his quality of life would go down for what he could currently afford. He is betting, as many people are, that in the next few years housing prices will fall.”

He is not the only one for whom renting makes more sense.

With fewer people owning a home, the number of renter households has been on the rise. Since 2004, number of households that rent has grown by on average 770,000 a year and in 2014 has reached a 20-year record high at 35.5%. At the same time, at 7.6%, the rental vacancy rate has hit the lowest point in 20 years.

The lack of available places for rent has, in turn, driven up prices of the places that are on the market. In 2014, rents rose at 3.2% rate, which is twice the pace of overall inflation, according to the report. As such, it should come as no surprise that the most affordable vacant units were most in demand. Between 2013 to 2014, the number of vacant units with rents under $800 dropped about 12%.

Poor Americans are also competing for limited resources. “In 2013, 11.2 million extremely low-income households – [those] earning up to 30% of area median – competed for just 7.3m units they could afford, leaving a gap of 3.9m units,” the report points out.

Both US renters and homeowners struggle financially. One in four homeowners paid over 30% of their income on housing and one in 10 paid over 50%. Of those living on income under $15,000, which is equivalent to full time pay at the federal minimum wage of $7.25, over 80% were cost burdened in 2013. About 26% of black households and 23% of Hispanic households struggles with high housing costs, compared to just 14% of white households.

When housing eats up most of their income, these households make sacrifices and spend 70% less on healthcare and 40% less on food than those not struggling with their housing costs.

It’s not just the low-income Americans who are struggling. About 22% of middle-class Americans – those earning between $45,000 and $75,000 – were cost burdened nationally. In metro areas like New York and Los Angeles, that number was up to 48%.

Despite all of this, Americans keep on dreaming about that white picket fence. Especially, the younger ones. According to the report, 92% of those 18 to 39 years old hope to buy a home down the road even as 62% of them admit that getting a mortgage might prove difficult.