The State of the Nation's Housing 2009 report gives U.S. market mixed grades

The nation's housing industry should remain mired in an epic slump for the rest of 2009, but the longer-term picture is not all doom and gloom, according to the "The State of the Nation's Housing 2009" report, to be presented on Monday by Harvard University's Joint Center for Housing Studies at the Ford Foundation in New York City. (We'll have more news from the event later this week.)

"Although there are some signs of improvement or at least steadiness in new construction and sales, housing starts stand near 60-plus year lows, and any life in home sales is coming from distressed foreclosure sales, temporary first-time buyer tax credits, and low-interest rates that moved higher in recent weeks," said Nicolas P. Retsinas, director of the JCHS, in a release before the New York City event.

The 44-page JCHS report details the perfect storm of unemployment, deflating home values, and tightening credit standards that has slammed the housing industry, starting in 2007. Low-income minorities have been particularly hard hit, as they not only face the highest job-loss rates but also live in neighborhoods with elevated foreclosure rates, the spillover effect of which exerts an additional drag on home prices.

Plummeting home values have taken a toll on people in all areas and all income levels. The Federal Reserve estimates that real home equity fell by $2.5 trillion in both 2007 and 2008. Depleted housing wealth reverberates throughout the economy as consumers curb personal spending and curtail cash-out refinances. (The chart shows how the drops in home construction and wealth impacted the U.S. gross domestic product.)

So where's the silver lining? For one thing, the recession is providing what many see as a necessary, albeit painful, correction to the housing market: Affordability has returned at the national level and in many metro areas, and housing production has dropped so dramatically that long-run supply and demand are now approaching balance.

Help is also on the way as the largest generation in American history—the so-called echo boomers, the baby-boomer children born in the early 1980s to mid 1990s—approach their peak household formation years of 25 to 44. That demographic event should spur home sales and fuel the remodeling industry. "With the echo baby boom driving demand for starter homes and apartments . . . the design professions will be called upon to deploy new technologies and designs to meet the aesthetic tastes and functional needs of a new, more diverse younger generation," said Mohsen Mostafavi, dean of the Harvard University Graduate School of Design.—Daniel DiClerico | e-mail | Twitter | Forums | Facebook

Comments

[eric]

Is my math so bad that I don't get this:

"...the so-called echo boomers, the baby-boomer children born in the early 1980s to mid 1990s—approach their peak household formation years of 25 to 44."

I was born in 1972 and I'm only 37 (next month). How are people born in the early 80s approaching 44?

[summit]

there are some aspects in real estate that brought bad and good news in my mind.. regardless of what this news is all about.. i guess every individual should really exert more effort in their sources of income...

but sometimes after all of this economic crisis.. treat yourself... here's some links that can be a big help..

http://boracay-crown.com/
http://fuentetowers.com/