Harvard's housing snapshot

Harvard's Joint Center for Housing Studies paints a less-than-rosy picture of the market in its newest State of the Nation's Housing report, out this week.

For instance:

One of the biggest drags on the housing market is the high joblessness rate. ... Unfortunately, most economists predict that the unemployment rate will remain elevated as discouraged workers reenter the labor force amid slow gains in jobs.
The overhang of vacant units for rent, for sale, or held off the market (including foreclosed homes) is another serious concern. Despite production cuts of more than 70 percent since 2005, the overall vacancy rate hit a record in 2009. In addition, many current owners are effectively trapped in homes that are worth less than the amount owed on their mortgages. If these distressed owners want or need to sell, their only choices are to walk away from their homes or write a check at the closing table. This will inhibit a recovery in repeat home sales.

Oh, is that all?

No, actually.

The Harvard folks note that even the Treasury Department expects 40 percent of people getting loan modifications through the federal Home Affordable Modification Program will re-default. And once number-crunching is complete, typical U.S. household incomes will "almost certainly" prove to be lower at the end of 2009 than they were at the beginning of the decade, accounting for inflation. And mortgage debt "has never been higher relative to home equity."

The report also notes a problematic trend in the rental market:

Nearly one in four tenants was spending more than half their income on housing costs in 2008. Many more were devoting at least 30 percent of income to rent. (Below that point is usually considered affordable.)

"The erosion of affordability over the last 50 years is striking," the report notes. "In 1960, only 12 percent of renter households spent half or more of their incomes on housing. By 2008, that share had doubled. ... In plain terms, the cost of supplying modest units even in less desirable neighborhoods exceeds the rents that large fractions of renter households are able to pay."

Joblessness and competition from homeowners-turned-landlords since 2008 has sent rents downward in many places. But renters earning less than they did two years ago don't see a net benefit from that change.

Tenants, are you able to find affordable places to live?

Landlords, what are the key factors keeping you from lowering your rents? Your mortgage payment? Property taxes? Maintenance needs?

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