Despite rising housing costs in the United States, the dream of owning a home is still within the reach of most Americans, according to a study by the Milken Institute. However, analysts for the private research institution say buying a home is getting harder in California.

Home ownership has been called the American dream. Americans flocked to the suburbs after World War II to buy a home and plot of land and, today, 68 percent of Americans own their own houses.

Economist Susanne Trimbath of the Milken Institute in Santa Monica, California, says three factors determine the cost of housing. "The price of the homes, the income levels, and of course, the interest rates," she said. " Even if housing prices go up, as long as mortgage interest rates stay low and income rises with it, you don't upset the balance of affordability."

Ms. Trimbath says "affordable" means paying 20 percent of the home price as a down-payment and financing the rest through a mortgage, paying no more than 30 percent your income in monthly mortgage payments.

In California, the home ownership rate is 58 percent, 10 percent below the national average. But in cities like Los Angeles, housing is too expensive for many families, despite mortgage interest rates at near-historic lows of under 6 percent.

Builders in California face environmental rules and other restrictions that add to their costs. Land is expensive and local communities often offer little incentive to build houses. Instead they encourage retail development because businesses pay higher property taxes than homeowners.

Allan Kingston is president of Century Housing, a nonprofit corporation that builds affordable housing. He says that in parts of California, people spend too much of their income on home mortgage payments. "It's not just 30 or 40 percent," he said. "We have many cities and metropolitan areas in California where people are spending 50 percent and more of their income or more just on housing."

The builder adds that too little new housing is being built in the state, which keeps the prices rising.

U.S. housing prices have risen steadily for the past 10 years, and some analysts worry that they have risen too high, creating a real estate bubble that is ready to pop.

But Ms. Trimbath says the United States has a four-month supply of vacant houses, one of the lowest inventories ever. She says the limited supply should keep the demand high, making a sudden price-drop unlikely.

The analyst notes that there is a housing bubble in at least one place, California's high tech region of Silicon Valley, where the median home price had risen to more than $500,000. The recent collapse of the Internet economy is driving down high costs there to more realistic levels.

Ms. Trimbath says members of minority groups have lower rates of home ownership than other Americans because they have, on average, lower incomes. Only 48 percent of African Americans, for example, own houses.

She adds that immigrants face the same problem, and they tend to buy homes later in life. When they do, however, their home-ownership rate is higher than the national average. She speculates that for immigrants, owning a home is part of the dream that brought them to this country, and they are determined to fulfill it.

She says as long as the balance of income, interest rates and prices stays stable, the dream of home ownership should be within the reach of many Americans, in most parts of the country. In places like California and in urban neighborhoods, she says officials need to do some planning to maintain adequate levels of affordable housing.