2007 Housing Forecast: Harvard's Take

The Harvard Joint Center for Housing Studies recently released its annual State of the Nation's Housing report for 2007. Although it states that the longer-term outlook for housing is (more) upbeat, it adds that the length and depth of the current correction will depend on:

• employment growth
  
• interest rates
  
• credit availability, and
  
• the speed with which builders pare down excess supply.
  

The report also predicts that home prices will soften further as they follow the downturn in home sales and starts. This means that homes will stay on the market for longer periods, and that motivated sellers, builders, and investors will reduce prices.
One bright note, says the Harvard analysts: no matter how long it takes, the market will eventually recover.

Source: Mortgage News Daily