Joint Center for Housing Studies releases State of Nation’s Housing report

Last week the Joint Center for Housing Studies of Harvard University (JCHS) released its State of the Nation’s Housing 2012 report. The report noted positive trends emerging in the rental and multifamily home markets. Demand for rental housing has continued to grow, benefitting not only the rental market, but stabilizing multifamily home values in the process. Additionally, new and existing home sales in early 2012 surged, while moderate growth occurred in new single and multifamily home starts. However, the report voiced continued concern with affordability and homeownership levels, citing tight rental markets and a growing demand for market rate new multifamily units.  The report also noted a significant increase in households with “severe” housing cost burdens (in excess of 50% of pre-tax income), growing to 20.2 million households in 2010. Despite average mortgage burdens that are now below average rent burdens and all-time low interest rates, researchers noted a continued decline in homeownership rates among all age segments, except for those 60 or older. The report also painted a bleak picture for the “echo-boomer generation.”  Weak employment prospects, tougher underwriting standards, and rising rent levels have contributed to a delay in the echo-boomer generation’s progression from living at home with parents to entering the rental market and eventually homeownership. Lastly, the report discussed the growing stock of vacant, but not for-sale, homes.  If these homes entered the market, they would increase the nations housing stock.  At its current 6 month supply level, market equilibrium exists that favors neither sellers nor borrowers in price negotiations.

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