As U.S. home sales and housing starts staged an uneven comeback that started in early 2009 according to a report from the Joint Center for Housing Studies of Harvard University but still faces a number of challenges.
"Elevated vacancy rates, record foreclosures, the expiration of the homebuyer tax credit, and continued high unemployment are all causes for concern," said Nicolas P. Retsinas, director of the Joint Center for Housing Studies.
The Joint Center predicts a dip in sales and housing starts as a result of the expiring homebuyer tax credit, but said very low mortgage interest rates and recovering labor markets should be enough to then shore up the market.
"If history is a guide, what happens with jobs will matter the most to the strength of the housing rebound,” said Eric S. Belsky, executive director of the Joint Center for Housing Studies. “Right now, economists expect the unemployment rate to stay high, but if employment growth surprises on the upside or downside, housing numbers could too."
Even if the recovery in sales and residential construction flourishes, the report said, the consequences of the recession and financial crisis will linger.
The Joint Center predicts housing policy challenges and opportunities will abound in the coming years. Housing affordability issues remain and the foreclosure crisis is expected to linger long-term.
However, housing also offers excellent opportunities for energy savings as the United States strives to reduce carbon emissions.
“Not only can new green building standards and innovative architectural designs help reduce energy consumption in the next generation of homes, there are opportunities to wring major savings out of the existing housing stock,” said Mohsen Mostafavi, dean of the Harvard University Graduate School of Design.
Over the coming decade, after employment turns around, the Joint Center said demographic forces should lift levels of household growth and spur increased housing sales. At the immigration rates projected by the Census Bureau, the U.S. should see growth of 15 million new households in the 2010-2020 period. Even if immigration is just half the projected pace, the number of new households should at least match the growth of 12.5 million witnessed in the 1995-2005 period.
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