Despite continuing economic concerns, the U.S. housing markets are showing signs of reviving, according to a new report released by the Joint Center for Housing Studies of Harvard University.
According to the Harvard report, titled ‘The State of the Nation's Housing,’ the homeowner market still faces a number of challenges: The backlog of roughly 2 million homes in the foreclosure process will keep distressed sales elevated and could keep price increases in check in places hardest hit by foreclosures, while more than 11 million homeowners who owe more on their mortgages than their homes are worth. Furthermore, the number of U.S. households paying more than half of their income for housing rose by 2.3 million between 2007 and 2010, bringing the total to a record 20.2 million.Â
However, the report notes that emerging trends point toward a stronger near-term future.
‘While still in the early innings of a housing recovery, rental markets have turned the corner, home sales are strengthening, and a floor is beginning to form under home prices,’ says Eric S. Belsky, managing director of the Joint Center for Housing Studies. ‘With new home inventories at record lows, unless the broader economy goes into a tailspin, stronger sales should further stabilize prices and pave the way for a pickup in single-family housing construction over the course of 2012.
‘Surveys consistently find that the overwhelming majority of young adults plan to own a home in the future, but many would-be buyers have stayed on the sidelines waiting for the job outlook to improve and house prices to stop falling,’ Belsky adds. ‘But as markets tighten, these fence-sitters may begin to take advantage of today's lower home prices and unusually low mortgage rates. With rents up, home prices sharply down, and mortgage interest rates at record lows, monthly mortgage costs relative to monthly rents haven't been this favorable since the early 1970s.’