A recovery in the housing market is being forestalled in the short-term by ongoing trends such as job losses and tighter mortgage credit, but in the long-term will be enabled by the up-and-coming generation of young adults, according to a new Harvard study.
The annual report, released Monday by Harvard University's Joint Center for Housing Studies, offered a mixed take on whether to be optimistic about the prospects for an economic recovery.
"Despite unprecedented federal efforts to jumpstart the economy and help homeowners keep up with their mortgage payments, home prices continued to fall and foreclosures continued to mount in most areas through the first quarter of 2009," reads the executive summary.
The key to the recovery is what the report calls "echo boomers," or the 75 million Americans born between 1979 and 1995. That's about as large as the famously gigantic baby-boom generation -- or the Americans born between 1946 and 1964 -- which as of 2001 numbered 77 million.
In addition to mounting job losses, the economic recession is dampening demand for housing in other ways, the report said. For instance, immigration has slowed, and more families are doubling up under the same roof.
Housing construction has also slowed, from 1.4 million a year during the boom to 1 million last year, the report said.
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