Every year I look forward to the release of the The State of the Nation’s Housing study by the Joint Center for Housing Studies at Harvard. Its a comprehensive macro look at our nation’s housing that is insightful and easy to read.

Download the report [pdf]

The report suggests that the current housing slowdown will be moderate but affordability problems over the next decade will continue to deteriorate.

Nevertheless, the housing sector continues to benefit from solid job and household growth, recovering rental markets, and strong home price appreciation. As long as these positive forces remain in place, the current slowdown should be moderate.

Over the longer term, household growth is expected to accelerate from about 12.6 million over the past ten years to 14.6 million over the next ten. When combined with projected income gains and a rising tide of wealth, strengthening demand should lift housing production and investment to new highs. But with the economy generating so many low-wage jobs and land use restrictions driving up housing costs, today’s widespread affordability problems will also intensify.

Here’s a sample of some of the wide variety of charts from the study:

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2 Responses to “Harvard: The State of the Nation’s Housing 2006”

  1. Anonymous says:

    So, what’s your thought? They seem to be saying that the two major factors in declines don’t exist. My question is that much of the job growth that we have had is…housing industry related. So, wouldn’t that suggest that a minor slowdown, resulting in job losses in the housing sector, could spiral into a nasty downturn? What qualifies as a “major” job loss? Are there other factors besides simply jobs and overbuilding that play in? What about their ominous affordability chart and the chart on household outlay? My thought is that their conclusions seem to ignore their other research, as though there can be no other factors but the two they bank on.

  2. Jonathan J. Miller says:

    I agree to a certain extent. One of the points of the study is that housing has risen so much, that this shows the market is solid – I feel this is not a point at all, rather it shows vulnerability. I think its something like 50% of the job growth or more over the past 5 years has been related to housing, suggesting that without it, the economy is not over heated.