Housing Recovery Depends on Jobs, Harvard Says

Cambridge, MA, June 14, 2010--An extended recovery of the housing market ultimately depends on job growth, according to a Harvard University study.

High unemployment is driving the foreclosure crisis and discouraging the formation of new households that drives property demand, according to the State of the Nation’s Housing report issued by Harvard’s Joint Center for Housing Studies.

The weak labor market has resulted in people sharing residences rather than buying their own home, the report said.

“What happens with jobs will matter the most to the strength of the housing rebound,” said Eric Belsky, executive director for the center in Cambridge, Massachusetts. “If employment growth surprises on the upside or downside, housing numbers could too.”

The percentage of consumers who planned to buy a home in the next six months fell to 1.9% in May after touching a seven-month high of 2.8% in March, the New York-based Conference Board said in a report last month.