Mortgage recovery to be very slow

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http://news.yahoo.com/s/nm/20080623/ts_nm/usa_housing_harvard_study_dc



Economic weakness does not bode well for income growth in the short run, and housing cost pressures are unlikely to lighten in the long term. Much of employment growth will be in part-time and low-wage positions, the study said.

"The somber conclusion is that if the economy slips into recession or job losses keep racking up, household growth and homeownership demand could fall even more," the center said in the release.

Barring a prolonged period of serious economic decline, the study projects household growth of about 14.5 million over the next 10 years. The main risk to that outlook is a drop in immigration from its recent 1.2 million annual pace due to weaker labor markets.

To get home affordability back to levels of 2000, before a five-year record home price and sales surge, "would take some combination of large price declines, interest rate reductions, rent deflation and unprecedented real income growth," the study said.