Is it true in all cases that time heals all wounds? A new study entitled “State of Nation’s Housing 2010” released the by Joint Center for Housing Studies of Harvard University on Monday shows that housing in not as scary as it was 12 months ago but the adverse consequences of the recession and the financial crisis will linger for many years. The report estimates that one in seven homeowners have homes worth less than what they owe on their mortgages and nearly 5 million need their home prices to rebound by 25 percent before they are back above water. The report states that the key to housing recovery is creation of jobs. Some take-aways for senior housing and living include:
- After holding steady at 12 percent in both 1980 and 2000, the share of severely burdened households (spending more than half their incomes on housing) jumped by a third, to 16 percent, in 2008. A record 18.6 million households faced these high cost burdens that year—up from 13.8 million in 2001.
- Saddled with debt, owners dragged down mobility rates (the share of householders who reported having changed primary residences within the previous year) which fell by about 12.6 percent from 2005-8 before stabilizing in 2009.
- Declines in mobility rates 2005-9 were greatest for homeowners, ranging from a 30 percent decline for those under age 35, a 35 percent decline for those aged 35-64, and nearly 40 percent for those 65 and over.
- Aggregate real home equity has not been this low (about $6 trillion) since 1985 when there were far fewer homeowners than today.
- The sheer size of the echo-boom generation will produce record numbers of households headed by young adults, while baby-boomers will shape the next generation of senior housing for years to come.
“Many factors are still weighing heavily on the market,” says Nicolas P. Retsinas, Director of the Joint Center for Housing Studies. “Elevated vacancy rates, record foreclosures, the expiration of the homebuyer tax credit, and continued high unemployment are all causes for concern.”
For the full report, visit: The State of the Nation’s Housing 2010