Thought Leadership On Building Better, Cheaper
And Faster Now In The Home Building Industry
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The State of the Nation's Housing.
Joint Center for Housing Studies of Harvard University
Despite unprecedented federal efforts to jumpstart the economy and help homeowners keep up with their mortgage payments, home prices continued to fall and foreclosures continued to mount in most areas through the first quarter of 2009. While new and existing home sales and single-family starts have shown some signs of stabilizing, ongoing job losses, house price deflation, and tighter mortgage credit are placing any recovery at risk.
In the worst housing construction cycle since the 1940s (Figure 1),
depressed demand is making it difficult for the market to work
off excess vacant units. Restoring demand to more normal levels
will take time since so many owners are in financial distress or
trapped in homes worth less than their mortgages. The recession
has also dampened both immigration and new household formation.
But once new home sales rebound and the economy begins
to pick up, the aging of the echo boomers—the largest generation
to reach adulthood in the nation’s history—should reinvigorate the
housing market.
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