Pent-up Demand Will Drive Housing Market

According to the Harvard University Joint Center on Housing Studies, in the first half of the decade 1.3 new households formed each year, but that fell to less than one million a year since 2005. Part of that is declining immigration, but 20-30 year-olds who have been reluctant to form their own households make up a larger portion. The Huffington Post reports the study says pent-up demand will ultimately see an increase of 12.5 to 14.8 million household growth in the coming decade. Most analysts agree that the housing market and the job market are linked, and now that employment is increasing, it is anticipated the housing market will begin to follow. Tom Lawler, an independent consultant who spent 22 years with Fannie Mae, tells the big unknown is the “shadow inventory”, houses where the owner is seriously delinquent and that may come on the market as current inventory clears up. “In a normal world, which we haven’t been in for so long, those loans would have been dealt with one way or another,” Lawler said. “But in our abnormal world, it’s all unknown.”

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