Skip to content
Link copied to clipboard

Difficult recovery for housing market in 'shock'

HACKENSACK, N.J. - The housing market has suffered a "massive shock" and faces a difficult recovery in the face of job losses, foreclosures and tight credit, according to a report released Monday by Harvard's Joint Center for Housing Studies.

HACKENSACK, N.J. - The housing market has suffered a "massive shock" and faces a difficult recovery in the face of job losses, foreclosures and tight credit, according to a report released Monday by Harvard's Joint Center for Housing Studies.

"It's difficult to overstate the challenges in the housing market today," said Nicholas Retsinas, director of the center, who presented the annual State of the Nation's Housing report in New York City. "While there are some positive signs in the marketplace, the macroeconomic forces are still overwhelmingly negative."

The good news is that the bursting of the housing bubble has made real estate more affordable. And, looking over the next 10 years, the huge "echo boomer" generation will soon start establishing their own households in large numbers, increasing demand for homes.

Eric Belsky, executive director of the housing center, said that the home price declines are likely to continue for some time - though they will not drop in most areas as much as in places like Florida, Nevada, Arizona and California, where developers overbuilt during the housing boom.

The report also said that:

_ Despite the drop in home prices, affordable housing is still out of reach for many Americans. The supply of homes built during the boom did not match the needs of working Americans, according to Sheila Crowley, head of the National Low Income Housing Coalition, who also spoke at Monday's event. In addition, job losses have left many families struggling to pay for housing.

_ Close to 4 million households have entered foreclosure since 2007.

_ Builders have reduced home construction to 60-year lows. But demand remains extremely low; it's as if builders saw "two out of every three customers disappear," Belsky said.

_ The national homeownership rate has dropped to 67.3 percent, erasing all the gains since 2000.

_ As of March, more than 14 million households owned homes that were worth less than their mortgages. *