Report on the nation's housing by the Joint Center for Housing Studies
Some highlights from the recently released report from the Joint Center for Housing Studies at Harvard University.
While economists remain upbeat about the long-term outlook of the residential real estate market, the near term is tainted by the uncertainty of future performance on loans set to readjust amid a struggling housing market.
The housing market continues to struggle under sharp drops in housing demand and oversupply of homes, and housing starts and sales are on track to end this year even lower.
"The air went out of the inflated housing market as higher home prices and interest rates finally tempered demand," said Nicolas P. Retsinas, a director of the Joint Center for Housing Studies, in an announcement. "Many buyers are now waiting on the sidelines hoping prices will fall."
The tightening of credit standards amid worse-than-anticipated subprime loan performance is further dampening demand.
The nation's largest housing challenge reportedly continues to be housing affordability.
"While it will take time to work out current loan problems and work off the oversupply of homes, the long-term outlook for residential investment remains strong," the Joint Center said in the announcement. Largely, as a result of a record number of new immigrants arriving in the United States in the 1990s and larger numbers entering this decade, net household growth is poised to accelerate by about 2 million to 14.6 million households 2005-2015.
"In addition, incomes and wealth stand higher for most households in real terms than ten years ago. This should translate into solid growth in both new construction and remodeling spending over the next ten years compared with the last ten."
"But the longer-term outlook for housing is more upbeat," according to the report. "Thanks in large part to recent immigrants and their native-born children, household growth between 2005 and 2015 should exceed the strong 12.6 million net increase in 1995-2005 by some 2.0 million. Together with the enormous increase in household wealth over the past 20 years, healthy income growth will help propel residential spending to new heights."
Please read the entire report (the 4 page executive summary is helpful). Whether you are buying or selling in the Charleston South Carolina real estate market, it is important to keep abreast of the current trends in housing and mortgage lending across the country.