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Harvard University State of the Nation's Housing 2006
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0 Comments ::  :: Investment, Economy, Second Homes |
THE OUTLOOK
Joint Center For Housing Studies Harvard University
The most immediate risks to the housing market now come
from the rise in interest rates, the erosion of affordability after
years of strong house price appreciation, and the growing inventory
of both new and existing homes for sale. But unless the
broader economy stumbles and job losses mount, home sales
and construction activity will likely dip only modestly.
House price appreciation should also remain positive in most
markets. Rising house prices, in turn, will encourage further
home equity borrowing and spending, although the pace of
borrowing will slow if interest rates keep climbing. Housing’s
contribution to economic growth is already diminishing and will
begin to turn negative if home sales, starts, and home equity
borrowing continue to decline.
Over the longer term, the outlook for housing markets is favorable.
With household growth accelerating and second-home
demand climbing, the number of conventional homes completed
and manufactured homes placed in the coming decade
should easily exceed the 18.1 million units added from 1995 to
2004. In addition, improvements in the mortgage finance system
over the past several years, together with stricter inventory
management in the home building industry, will help to dampen
boom-bust cycles in the future. As a result, housing production
should average more than two million units annually over the
next ten years.
http://www.jchs.harvard.edu/publications/markets/son2006/index.htm
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