Harvard: US Housing Recovery Will Require Job Growth

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Harvard: US Housing Recovery Will Require Job Growth

06-15-2010 | Source: emii.com

A study conducted by Harvard University suggests the strength of the U.S. housing market recovery will be heavily dependent on jobs growth, according to Bloomberg News. The Harvard Joint Center for Housing Studies’ State of the Nation’s Housing report said that following the expiration of the federal homebuyer tax credit, the housing market is especially susceptible to the negative effects of high unemployment, which is extending the foreclosure crisis.

The Harvard study showed that weak hiring forced many people to “double-up” and share living quarters rather than form a new household, which in turn has suppressed property demand. The homebuyer tax credit offered up to $8,000 for those who signed contracts by Apr. 30 and closed on the property by Jul. 1. According to Lawrence Yun of the National Association of Realtors, the program resulted in a boost of one million home sales since in began in Feb. 2009, and analysts agree that the major challenge going forward will be increasing foreclosures without a hiring-induced pickup in home sales.