The U.S. housing market will rebound eventually, according to a Harvard University report. Demographics and underbuilding are conspiring to up demand and revive home prices.
But that day still is a long way off, perhaps not until sometime after 2010, the university’s Joint Center for Housing Studies said in its 2009 State of the Nation’s Housing report.
For now, the housing center said:
“Clear signs of a recovery have yet to emerge, and job losses and the steady stream of foreclosures are keeping many markets under pressure. Sales of both new and existing homes continued to struggle to find a bottom through April.”
The annual state of the nation’s housing report — largely a review of data through 2008 — told us mostly what we already know: that housing market conditions deteriorated last year. Specifically:
- Housing starts were down more than 50% from 2005, the year the boom ended.
- Manufactured housing shipments decreased for a third consecutive year.
- Demand for new homes fell faster than production, resulting in a record supply of 12.4 months by January.
- Sales of existing single-family homes fell 30% from 2005.
- Sales improvements largely reflect purchases of foreclosed properties at fire-sale prices.
- Foreclosed homes accounted for a third of all existing home sales in the fourth quarter of 2008.
According to the housing center’s press release:
“First-time homebuyers are struggling to meet today’s stricter underwriting guidelines, household growth is well below long-term trends, and immigration has slowed; as a result, the share of homes for sale and vacancies stand at near record levels despite sharp decreases in housing production.”
The silver lining? Children of baby boomers, the “echo boom,” will be of age to form independent households in coming years, so that household growth from 2010 to 2020 will rival the decade of this past boom from 1995 to 2005