The housing market is gaining strength and 2012 could mark the beginning of a true market recovery, according to a new report, The State of the Nation’s Housing 2012, released today by the Joint Center for Housing Studies of Harvard University.
“While still in the early innings of a housing recovery, rental markets have turned the corner, home sales are strengthening and a floor is beginning to form under home prices,” said Eric S. Belsky, managing director of the Joint Center for Housing Studies in a news release.
“With new home inventories at record lows, unless the broader economy goes into a tailspin, stronger sales should further stabilize prices and pave the way for a pickup in single-family housing construction over the course of 2012.”
A rebounding rental market, an increase in new and existing home sales and moderate gains in multifamily construction are all factors that point to a turnaround in the market, according to the report. But the housing market also faces ongoing challenges including a backlog of foreclosures, fewer household formations and slow job growth.
Some highlights of the report:
- By the first quarter of 2012, existing home sales (single family and condos) were 5.2 percent above year-earlier levels, with single family sales up 6.3 percent.
- After hitting a record low of just 306,000 in 2011, sales of newly constructed homes in the first quarter of 2012 stood 16.7 percent above year-earlier levels.
- The inventory of existing homes for sale shrank by some 23 percent in 2011, reducing the supply in the first quarter of 2012 to its lowest level since 2006.
- The monthly mortgage payment for the typical home currently compares more favorably to rents than at any time since the early 1970s.
- Renter growth hit 1.0 million in 2010-2011, the largest annual increase since the early 1980s.
- According to MPF Research, nominal rents on investment-grade multifamily properties rose 4.7 percent from the fourth quarter of 2010 to the fourth quarter of 2011—double the 2.3 percent increase a year earlier.
Download the full report, a video Q &A, fact sheet and more from www.jchs.harvard.edu.