We aren’t even halfway through a 10-year transition in the housing market. “In the beginning of 2007, Countrywide announced a decline in its Alt-A book,” kicking off the credit crisis, Doug Duncan, chief economist for Fannie Mae said Wednesday at HousingWire’s REthink Symposium. “We are in year four of a 10-year transition.” The transition, Duncan clarified, is in the process of returning to the old normal. This is characterized by stability in home prices and wages. In the run up to the bust, he explained, wages increased with asset prices, slowly and gradually to an unsustainable place. “It took 10 years to get there, so it will take 10 years to get back.” The mentality of the American public is shifting during the period of transition. The desire for homeownership is significantly diminished. This is to the point that the issue is no longer viewed as a supply problem, but a demand problem. Americans who would typically buy a detached, single-family unit, are more willing to rent the same kind of property. Investments in the one to four-unit multifamily space, as a result, will continue to grow for some time. The perceived safety of homeownership is a dying notion, it would seem. But the aspiration to own a home remains constant, Duncan said. We are currently running at between 68% to 69% homeownership. A generally perceived stability ratio is closer to 66%. Duncan suggests homeownership closer to 64%. A shift of one percent equals around 1 million houses. Duncan spoke at a panel titled The New American Dream: Imagining the Future of U.S. Real Estate. Jonathon Weiner a vice president in research and development at LPS Applied Analytics noted prices that increased greatly in city centers and exurbs during the run up, are now seeing declines up to 60%. “Thirty five percent of borrowers are underwater,” Weiner said. “About half have second liens. Only 8.5% are refinancable.” John Burns of John Burns Real Estate Consulting said it may seem like a disconnect that housing is more affordable than ever, but there is a decline in new home sales. “The consumer is so levered up to their eyeballs, especially those who don’t own a home,” Burns said, adding the fundamentals for recovery are there, but it will take time for a recovery in housing. However, back-end debt is keeping many consumers from qualifying for a mortgage. “There are 4.5 million people out there 90-days delinquent or more,” Burns said. “That’s a year’s supply. They will need to be flushed out of the system.” Write to Jacob Gaffney. Follow him on Twitter @JacobGaffney.