The report pointed to an all-time high homeownership level of 69 percent in 2004. Additionally, demand for new homes could reach 20 million units by 2015, the study, the State of the Nation's Housing 2005, said.

With the inventory of new homes for sale at near-record lows, the study indicated that demand for new homes would have to drop by more than one third "and stay there for at least a year to create anywhere near a buyer's market."

The study also echoed recent reports of soaring home prices.

"With double-digit real house price inflation in 53 out of 163 of the largest metros and four of nine census divisions, aggregate home equity climbed 10 percent to $9.6 trillion in 2004," the report said.

Such increases have created wealth to be tapped by existing homeowners, but it also has put increasing pressure on those looking to buy their first homes.

"House price inflation has outpaced per capita income gains by more than four times in 31 metros, three to four times in 19 metros and two to three times in 32 metros," said the report, which also pointed to other troubling indicators.

One out of every three American households spends more than 30 percent of income on housing and one in five spends as much as 50 percent. Another 2.5 million households are not overburdened by housing costs but do live in crowded or "severely inadequate" homes, the report said.

Between 2000 and 2003, the number of households spending more than 30 percent of their income on housing jumped by nearly 5 million, the report said. Those spending more than 50 percent on housing jumped by about 2.5 million during the same time.

Those numbers concern Scott Bice, Nevada's mortgage lending commissioner. As borrowers become more desperate to get into a home, they are more likely to fall victim to unscrupulous lenders.

"The big issue that I still see looming on the horizon for us nationwide is that a huge percent of the business being done -- and maybe higher in our state -- is the no-income, no-asset loans," he said.

Those loans can allow people with high percentages of unreported income -- like tips -- or little in the way of cash in the bank to get into mortgages that several years ago would be unattainable. There is, however, a catch to many of those loans, particularly the interest-only loans that have the borrowers paying only interest in the first year -- typically five years -- of the loan. Once that period is over, however, principal kicks in and payments spike by several hundred dollars.

Many borrowers go into those loans hoping to refinance before that adjustment, but now slower appreciation rates and expected higher interest rates could muddy the waters.

Bice said he expects many of those loans to adjust in the next two years, possibly leading to a flood of home sales hitting the market or a spike in foreclosures.

Compounding the problem, he said, is that many people have been steered into these loans at a time when interest rates were at an all-time low for fixed loans that come free of surprises down the road.

"With fixed-rate loans where they are at, there's no reason people should be going with adjustable loans," Bice said.

The Harvard study, however, indicated that plenty of people are still going with adjustable-rate and other easy qualifying loans.

"Less than one-half of all home purchase loans in 2004 were standard 30-year, fixed-rate mortgages," the study said. "Interest-only loans, low- and no-down payment loans and adjustable-rate mortgages have all gained in market share."

"Homebuyers choosing an adjustable-rate mortgage could be in for payment shock if interest rates take off," the report said. "Even if rates to which mortgages are indexed do not go up, borrowers that took out loans with a one-time discount will see their payments increase by 0.4 percent to 1.5 percent over the course of 2005."

The report said that while interest-only loans were just a "small share" of all home purchase loans a few years ago, they were nearly one-third of all 2004 loans.

Sub-prime lending, according to the study, grew from $340 billion in 2003 to $530 billion in 2004.

Kevin Rademacher covers utilities and finance for In Business Las Vegas and its sister publication, the Las Vegas Sun. He can be reached at (702) 259-4069 or by e-mail at kevinr@lasvegassun.com.