HACKENSACK, N.J. — The housing market is beginning to recover but could stall if the United States doesn't have sustained job growth, the Joint Center for Housing Studies at Harvard University said last week.
And despite more affordable home prices, millions of households in the United States — mostly renters — struggle with monthly housing costs, the center said in its annual State of the Nation's Housing report.
"Almost one-fifth of households report spending more than half of their income on housing," said Eric Belsky, managing director of the center. "That's not only a housing crisis; it means there's that much less to spend on everything else."
"The housing sector is turning a corner, but we need to think about what to do to serve everybody," George McCarthy, an executive with the Ford Foundation, one of the report's sponsors, said at a news conference in New York.
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Rental construction is the liveliest sector of the real estate market, pushed up by demand from people who have lost their homes or held off on buying. The number of renters jumped 5.1 million in the 2000s, the largest decade-long increase since World War II, the report said.
At the same time, because of low interest rates and sliding home prices, the monthly cost of owning, compared with renting, is at its most affordable since the 1970s, the report said. But many households can't take advantage of buying because they can't meet lenders' tighter mortgage standards, the report said.
Still, home sales have been slowly rising this year, after hitting post-World War II lows in recent years.
"It's mirroring what's happening in the job market — steady but not spectacular growth," said Chris Herbert, research manager at the center.
Sales have been restrained by weak growth in new households because of lower immigration numbers and the tendency of under- or unemployed young people to stay with their parents. But household formation is expected to pick up as the so-called echo boomers — a large generation made up of the children of the baby boomers — eventually launch themselves out of mom's basement.
Among the other findings in the report:
■ About 2 million homes are in the foreclosure system nationwide. Because these properties usually sell at a steep discount, they will tend to keep market prices in check.
■ The U.S. home ownership rate was 65.4 percent in the first quarter of the year — its lowest level since 1997. It peaked at more than 69 percent in 2004.
■ Only about a quarter of very low-income houses receive housing assistance.