ACCORDING TO A REPORT BY HARVARD UNIVERsity's Joint Center for Housing Studies, Cambridge, Massachusetts, The State of the Nation's Rousing: 2002, the growth in homeownership and consumer spending linked to accumulated home equity was an important reason why the recent economic recession was so mild.
"Last year alone, the housing sector set records for existing-home sales [5.3 million] and the value of single-family construction [$206 billion], while price appreciation pushed the aggregate value of homes to a record-high $12 trillion and home equity to a record $6.7 trillion," said Nicolas P. Retsinas, director, Joint Center for Housing Studies.
According to the Joint Center's 2002 report, the housing sector is poised to set new records for production, sales and aggregate home equity in the years ahead, as strong growth in immigrant and minority households will result in an expected 22 million increase in the number of homeowners and a 1.6 million increase in renters over the next 20 years. Accounting for almost two-thirds of household growth, the report forecasts that minorities will constitute more than half of all renters and a quarter of all owners by 2020.
Despite the overall robust assessment of housing market conditions, the report documents how mortgage defaults and foreclosures are on the rise among recent lower-income purchasers, especially those families who accessed new forms of higher-cost subprime mortgages to acquire a first home. The...