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Thursday, June 15, 2006
Harvard report sees soft landing, affordability squeeze
Good news and bad news from the widely watched “State of the Nation’s Housing” report from Harvard University’s Joint Center for Housing Studies.
The good news: The housing market’s slowdown looks to be a soft landing rather than a crash.
“Despite the current cool-down, the long-term outlook for housing is bright,” the study says.
In the coming years, the Baby Boomers’ children — the big chunk of kids known as Generation Y — and immigrants will boost demand for homes, the report says.
Now, the bad news: The affordability squeeze is tightening.
“While the vast majority of Americans still pay a manageable share of their income for housing, affordability problems are worsening. In just the three years from 2001 to 2004, the number of households paying more than half of their incomes for housing shot up by 1.9 million.”
And with fewer good jobs available for unskilled workers, the affordability gap won’t go away.
“Working in no way protects families from the hardship of high housing outlays,” the study says.
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