The homeownership rate will drop further unless house prices rise substantially, as people who owe more on their mortgage than their house is worth become renters, according to a study released Friday.

New York Federal Reserve Bank economists Andrew Haughwout, Richard Peach and Joseph Tracy calculated an effective homeownership rate, in which they counted negative equity households as renters rather than homeowners.

This rate was 5.6 percentage points below the official homeownership rate calculated by the Census Bureau -- a difference the researchers said appears to be unprecedented in the postwar period.

Unless house prices increase substantially, many negative equity homeowners will in fact convert to renters in the years ahead, and the measured rate of homeownership will decline toward the effective rate, they wrote.

The official homeownership rate has fallen from a high of 69 percent to 67.2 percent as the U.S. housing bubble burst and the unemployment rate shot up.

The researchers said negative equity homeowners would have to ramp up their savings by formidable amounts to stay in their homes or buy a new home.

In areas that were particularly hard-hit by the housing crisis the gap between the official and the researchers' effective homeownership rate was as much as 39 percentage points.

Homeownership has historically been central to the American Dream. Encouraging it has been a goal of public policy. The idea is that homeowners are more likely to take care of their homes and be active in their local community, the study said.

A drop in the homeownership rate may create a large set of residents who are less invested in the long-run outlook for their homes and communities, the researchers wrote.

Public policy initiatives that encourage principal write-down would be more effective in supporting the homeownership rate than those that focus solely on the borrower's monthly mortgage burden, they wrote. This would help keep homeowners in their homes without sharply reducing consumption, they wrote.

(Reporting by Kristina Cooke; Editing by Andrew Hay)