National Housing Report released from Harvard University
The Joint Center for Housing Studies at Harvard University announced the release “The State of the Nation’s Housing” report on June 14, 2010. The 44 page report (not including Appendix Tables) is broken into 6 major sections beginning with the Executive Summary. The over-riding conclusion is that in order to achieve a strong recovery in the housing market, it is key that unemployment levels decline.
In the Executive Summary, many factors are addressed that become a consistent theme throughout the report. For example, In 2009, “more than 1 in 7 homeowners owed more on their mortgages than they their homes were worth.” In addition to the homes underwater, “more than a third of existing home sales last year–about 1.8 million units–were short sales or foreclosures.”
The report states, “Improved affordability for first-time home-buyers due to lower market values and a federal first-time home buyer tax credit were vital to this early rebound.” Even so the expiration of the tax credit impacts the market with a “noticeable fallout in sales.” The increased number of vacant units along with the decrease in movement across the board creates a negative drag on the movement towards recovery.
The report contains many references to government programs initiated to help decrease the number of foreclosures and to bring aid to homeowners who are experiencing stresses from job loss and/or loss of wealth.
Other factors contributing to the national picture including unknown Household Growth variables, immigration pattern, diversity and housing demands. as well as, green building standards and transit-friendly development patterns on a local level. Figure 4 from the report illustrates the size of the generations and the percentage of minority share in each generation in 2009. The report notes the following definitions for 2010.
- Echo-boom generation are aged 5-24
- Baby-bust generation are aged 25-44
- Baby-boom generation are aged 45-64
The report is dense with statistical data but compelling. The document is a snapshot of the national housing market. By looking at historical data, assumption are drawn. On the high level is the importance of the job market–not that we didn’t know any of this already. Yet with the many sources of data, historical and current (up to 1st quarter 2010) we have lots of evidence thorough the statement. Some of the authorities sited are as follows.
- National Association of Realtors
- U.S. Census Bureau
- Mortgage Bankers Association
- Barclays Capital
- U.S. Department of Housing and Urban Development
- Federal Reserve Board
- Bureau of Economic Analysis
- First American Core Logic
- Department of Transportation
- Environmental Protection Agency
There many favorable trends referenced like the movement towards more condensed urban housing and the green movement. Keeping these over-arching aspects in mind, the report is optimistic. The brains at Harvard once again put the spotlight on what is good and noble for our country. Now only if people will get it.
Next I’ll be looking at Section 2 Housing Markets. I’m learning as a write and encourage comments.