The state of the nation's housing? In a word, "depressing," according to the latest State of the Nation's Housing report from the Joint Center for Housing Studies at Harvard University.
The report paints a picture of a market weighed down by distressed properties and a reluctance of would-be buyers to take a chance on buying a house today that may be worth less than what they paid tomorrow. Worse, though, the report says, is that those who are willing to commit are being thwarted by higher income, downpayment and credit score requirements.
"While many households aspire to home ownership," the 2011 report says, "underwriting standards may stand in their way."
The report takes great pains to point out bright spots. One is a tightening rental market. Another is the growth of younger households that are anticipated to be formed over the next decade. And a third is an aging baby boom generation, a segment of which can be expected to downsize rather than age in place.
But otherwise, the state of the nation's housing is "sobering" at best, says Eric Belsky, the Joint Center's managing director.
Although the vigor of the recovery depends on demand, the report finds no signs yet that buyers are ready to come off the proverbial fence. Says Research Director Chris Herbert: "It is still not clear when home buyers will have the urgency to return to the market in sufficient numbers to lift the market in a meaningful way."
A big reason for that is that elevated vacancies and foreclosures continue to place downward pressure on prices. The report cites a March release from Lenders Processing Services, which said that on top of some 2 million home loans that are at least 90 days delinquent, 2.2 million more were in the foreclosure process. And it "could take years," it says, for those markets with a disproportionate share of foreclosures "to recover from this calamity."
"Given that the foreclosure wave is still cresting and would-be buyers are waiting for prices to firm, home ownership rates could continue to decline in 2011," the report says. And that creates something of a vicious circle, it adds, for "the further the home ownership rate falls, the longer it will take to work through the excess inventory of houses for sale and held off market."
