The U.S. housing recovery should regain its footing, but also faces a number of challenges, according to an annual report from the Joint Center for Housing Studies of Harvard University.
Tight credit, still elevated unemployment and mounting student loan debt among young Americans are moderating growth and keeping millennials and other first-time homebuyers out of the market, the report suggests.
“The housing recovery is following the path of the broader economy,” the center’s research director Chris Herbert said in a statement. “As long as the economy remains on the path of slow, but steady improvement, housing should follow suit.”
Although the housing industry saw notable increases in construction, home prices and sales in 2013, household growth has yet to fully recover from the effects of the recession. But given the sheer volume of young adults coming of age, the number of households in their 30s should increase by 2.7 million in the coming decade, which should boost demand for new housing, the report states.
“Ultimately, the large millennial generation will make their presence felt in the owner-occupied market, just as they already have in the rental market, where demand is strong, rents are rising, construction is robust, and property values increased by double digits for the fourth consecutive year in 2013,” the center’s research manager Daniel McCue added.