New survey data has uncovered the secret reason for why housing has yet to fully recover – though admittedly, it’s a pretty straightforward explanation.

Interest rates remain at historic lows. Home price gains have moderated, and remain at competitive levels. Home lending is loosening, and more banks are tiptoeing into residential mortgages. Why then, nearly full six years after the financial crisis, has the housing market not fully recovered? Low inventory is the most frequently cited culprit, but new research by the Federal Reserve has shined a light on a much more dire, fundamental problem for housing – simply, too many people cannot afford to buy a house. According to the research, which The Wall Street Journal recently spotlighted, 57 percent of Americans who had savings prior to 2008 used up some or all of their savings following the recession; moreover, only 48 percent of Americans can cover an emergency $400 expense without either selling something or borrowing. If more than half of Americans need to sell possessions or borrow to cover $400, how could they manage a downpayment on a house? See our graphs below for more detail on the survey results: